Presented at the Market Research Summit in 2015, this paper examines the complex research techniques required to provide an accurate forecast for the FCA as incoming regulator when predicting the size of the Consumer Credit market in the UK.

1. MR SUMMIT:
PREDICTING THE FUTURE FOR THE FCA
JAMES HOPKINS, CRITICAL RESEARCH
EMMA ROBERTS, FINANCIAL CONDUCT AUTHORITY

2. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
CONSUMER CREDIT
Regulated by the Office of Fair Trading until 2014
An estimated 80,000 had consumer credit licences
FCA took over on 01 April 2014
 Who are these firms?
 Sizing - how many of them are there?
 Comms - what do they already know about the change?

3. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
A HIGHLY DIVERSE POPULATION
Money lenders
 Banks
 Credit unions
 Pawnbrokers
Non financial firms
 Furniture shops
 Golf clubs
 Dentists
 Car dealers
Brokers
 Financial advisers

4. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
RESOURCE PLANNING
How many firms could the FCA expect to be regulating from 01 April 2014?

5. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
WELL BRIEFED INTERVIEWERS
Provided feedback on questions and flow
Vital for establishing underlying views
Inconsistencies identified
Call-backs to establish real intentions
WHAT WAS OUR APPROACH
GOOD QUESTIONNAIRE DESIGN
Designed to cater for the diversity of firms
Included sufficient background to educate
Enough days timetabled to allow iterations
THOROUGH PILOT FEEDBACK
Ensured the two objectives did not conflict
Follow up interviews to check understanding
Best question sequence and flow assessed
On the face of it, a very typical telephone research methodology …

6. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
ESTIMATING A NEW POPULATION
Three additional steps, first to establish a new population, then to ensure we had valid data
INVESTIGATIVE CALLS
Calls to firms with a valid phone number
Results combined with desk research
“Probability of trading” calculated
Overall trading population of 62,000
DESK RESEARCH
Paid-for company checking services
Were the uncontactable firms trading or not
VALIDITY CHECKING
Used OFT licence retention data
Profiled for interviewed and refused
Recalibration for non-response errors

7. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
51000
49700 49400
40000
42000
44000
46000
48000
50000
52000
Initial forecast Final forecast Actual outcome
A FINAL ADJUSTMENT
Very 95%
Quite 90%
Not very 0%
Not at all 0%
Adjustment algorithm
+0.6%

8. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
CLEAR MARKETING OBJECTIVES
Knowing we had c.50,000 firms to target drove many of the budget decisions
We knew now the scale of the marketing required:
 Communicate effectively with 50,000 firms
 Reach all corners of a very diverse audience
 Raise awareness of registering with the new regulator
 Explain the severe consequence of inaction
 Encourage a spread of response over time

9. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
NEW STRATEGY FOR THE FCA
Moving away from literature heavy marketing
 Engaging with trade bodies and trade press
 Radio advertising
 National press
 Direct mail campaign
 Regular reminder emails
Behavioural nudges alongside traditional brand building
 Discount period to encourage early applications

10. MR SUMMIT: PREDICTING THE FUTURE FOR THE FCA
SOME GROUPS NOT ENGAGED
Some unaware of the consequences of missing
the deadline
Others were leaving it to the last minute
Assumption that the transfer was only aimed
at financial services firms
FINE TUNING THE CAMPAIGN
Further research showed the campaign was working well, but needed fine-tuning …
SECOND WAVE CONDUCTED
Urgency of language increased
Trade press engaged to target specific sectors
such as estate agents, builders, motor trader
FCA WAS MAIN INFO SOURCE
Further research showed the FCA was the
primary source of information
By the end of the campaign, awareness of the
need to act had risen from 21% to 98%
21%
98%