Broadstone has launched a service to help lenders assess and improve their affordability frameworks.

The independent UK consultancy said its Affordability Health Check would examine firms’ governance, assessment methodologies, data sources and controls.

It will also benchmark each lender’s approach against those of its peers and regulatory expectations.

Lenders will receive a report containing prioritised recommendations, an improvement roadmap and indicative costs and support options for implementation.

The service has been introduced amid increased scrutiny of affordability outcomes under the Consumer Duty. Broadstone said developments in data and verification techniques were also allowing lenders to tailor assessments more closely to individual circumstances.

It is aimed at firms operating in motor finance, consumer lending, credit unions, specialist finance and buy now, pay later.

Harry Charalambous, principal in the banking and credit advisory division at Broadstone, said: “Affordability assessments are a critical part of responsible lending, but many firms are working with frameworks that have evolved incrementally and may no longer reflect current regulatory expectations, or take advantage of the latest tools, techniques and analytical approaches.

“With Consumer Duty increasing the focus on customer outcomes, lenders need to be confident that their approach is robust as well as being supported by effective governance and controls.

“Advances in data and verification techniques provide an opportunity to make assessments more accurate and tailored to individual circumstances.

“Our Affordability Health Check gives lenders an independent view of how their framework compares with peers and regulatory expectations.

“It then enables them to identify practical improvements that can strengthen customer outcomes and increase operational efficiency for firms across a wide range of sectors within the lending industry.”