ResPublica are prompting banks to rework the current PPI scheme and join the likes of the US and Canada in offering a ‘risk waiver’ instead of payment insurance.
It has recently been suggested that a new approach may be taken to payment protection insurance (PPI).
An influential thinktank, ResPublica, is prompting banks and top lenders to rework the ‘infamous PPI scheme’ to restart the cycle of lending and spending by consumers and small businesses.
If the new system was to be adopted, instead of the payment insurance being added to the price of a loan as an extra payment or higher interest rate, a ‘risk waiver’ would be offered.
This would mean that SMEs, described by The Guardian as ‘the work horses of the economy,’ would be able to take those opportunities for small business loans and ultimately feed business back into our economy by creating more jobs.
This positive spin on something that has negative connotations has already been popular for over 75 years, being offered in the US and Canada by CUNA Mutual Insurance. The waiver is shown to safeguard lending as transparently as possible.
‘The time has arrived’, says Paul Walsh, CEO of CUNA Mutual Europe, ‘for lenders to proactively respond to their consumer’s need and help them overcome their fears and address the inertia in the lending market.’
Grovelands has already seen a change in the level of PPI roles in the past year, and we can expect this to continue as PPI develops.
We would love to hear your thoughts on what would be a dramatic shift in the industry. Contribute to our discussion in the Grovelands LinkedIn group.