Single Customer View for Faster Payout
In December 2010, The Financial Services Authority (FSA) introduced new rules for the Financial Services Compensation Scheme (FSCS) and deposit takers (i.e. banks, building societies and credit unions), to ensure eligible depositors (i.e. individuals and small businesses) will be compensated more quickly if a deposit taker fails.
From 31 December 2010, the Deposit Guarantee Schemes Directive (DGSD) required deposit guarantee schemes (i.e. the FSCS in the UK) to pay out compensation within 20 business days of the default of a deposit taker.
A key element of meeting these reforms was the requirement on deposit takers to develop a single customer view (SCV). The provision of a SCV provides the FSCS with the information required to make a fast payout, with a payout target of seven days from default and in any event within the DGSD timeframes.
Since the new rules were introduced a small number of deposit taker defaults have occurred and in each instance, by using the SCV, the FSCS has been able to make payment to eligible deposits in less than seven days.
Verification Update
In order to ensure that SCV requirements were adopted fully and correctly a verification programme was included within the SCV rules.
Since 1 February 2011, the FSCS has been verifying ‘signing-off’ deposit takers’ ability to meet SCV requirements by reviewing the Implementation and SCV Reports submitted by all deposit takers and sample data files submitted electronically by deposit takers holding more than 5,000 accounts (or those below 5,000 who chose to submit electronically).
The verification programme closes on 31 July 2011. After this happens, the FSCS will report its findings on each deposit taker to the FSA. The FSA will then decide whether the deposit taker meets with SCV requirements before issuing a final notification.
In addition, the FSA intends to carry out further thematic work to review the SCV systems and production methods of a sample group of deposit takers of various sizes and business models. The FSCS will assist in these activities and the initial review may also include issues identified by the FSCS as part of the verification programme. Further details of these activities will be available once the verification programme is complete.
Questions and Answers
The FSCS plans to produce a series of documents answering questions we have received since the FSA's announcement.
Latest News
We also intend to keep stakeholders informed of events and news that are relevant to the SCV programme.