This month, Flagstone hosted their Q1 Banks Forum in London over two days, with representatives from over 30 banks in attendance. With our bank partners, we discussed several topics including:

1. The upcoming implementation of Consumer Duty on cash deposit platforms
   
   
2. Flagstone’s new FTD rollover functionality
   
   
3. Capacity constraints across deposit taking banks

Our open dialogue with banks helps us to ensure that our clients are treated in the best manner possible, in line with the tenets of Consumer Duty. We worked through each of the topics at this forum, helping to foster alignment across our partners and provide the optimal solution for our clients. The key takeaways are summarised below.

Consumer Duty

• We need to ensure that the client journey and the relationship between the client, the deposit taking banks, and Flagstone is clear. It’s also important that clients fully understand their FSCS protection and the fees paid for the service.
  
  
• We must ensure that the responsibilities of cash deposit platforms and banks are clearly defined. It was agreed that deposit taking banks would be defined as manufacturers, whilst cash deposit platforms would be distributors.
  
  
• Data needs to be transferred between banks and cash deposit platforms in order to demonstrate that clients are receiving good outcomes. Whilst Flagstone already shares a considerable amount of the data points needed, additional data on customer service levels, FTD breaks, and the results of consumer testing may be needed.

FTD Rollover Functionality

• Flagstone will be launching a new FTD rollover functionality, expected to go live in Q2.
  
  
• The aim of this functionality is to improve the client experience whilst also improving the liquidity treatment of funds depositing through Flagstone to its deposit taking banks.
  
  
• There was broad agreement that this was a positive outcome for our clients and will help banks from a liquidity treatment perspective.

Capacity constraints

• A lack of understanding at board and c-suite level leads to conservative capacity constraints so there is a need to increase the dialogue at this level.
  
  
• Contractual amendments can help to address some of the concerns around insolvency and concentration risks.
  
  
• There was a particular focus on the outcomes from the PRA review from 2022. It was felt that the PRA may provide further clarity on capacity constraints as a result of this.

In addition, Flagstone provided an overview of one key priority for this year – utilising our technology to the best of our ability by migrating clients onto a new back-end technology platform. This will increase Flagstone’s ability to deliver on a new scale at ever more efficient speeds for our clients. This work has begun and will continue throughout 2023.

For further information on any of the points discussed above please contact Banksteam@flagstoneim.com