How do lenders produce explainable adverse-action notices?
Explainable adverse-action notices are produced from monotonic-constrained models plus feature-attribution (SHAP or equivalent), translated into a plain-English CONC-compliant template. The output is the top three contributing features, an intelligible reason and — where honest — a suggested corrective path. This is a Consumer Duty accelerator, not a compliance cost.
Explainable adverse-action notices are produced from monotonic-constrained models plus feature-attribution (SHAP or equivalent), translated into a plain-English CONC-compliant template. The output is the top three contributing features, an intelligible reason and — where honest — a suggested corrective path. This is a Consumer Duty accelerator, not a compliance cost.
Why generic notices fail Consumer Duty
A boilerplate 'we are unable to offer credit at this time' notice is technically compliant and functionally useless. Consumer Duty raises the standard: outcomes matter, and an outcome that leaves a customer no clearer about what to do next is a poor outcome.
The mechanics of an explainable notice
- Model architecture with monotonic constraints on the features that matter most.
- Per-decision feature attribution (SHAP or equivalent).
- Feature-to-language mapping curated by compliance and product together.
- CONC-compliant template with plain-English top-three reasons.
- Corrective-path suggestion where honest — omitted where not.
- Full audit trail: model version, features, attribution scores, template version.
Related questions
Is SHAP acceptable to the FCA?
Yes, when combined with monotonic constraints and a documented governance package. It is the current practitioner default.
What about black-box models?
The architecture assumes explainability constraints. A model that cannot be explained is not shipped to a customer-facing decision.
Corrective-path suggestions — legal risk?
Only suggest what is genuinely likely to help. Legal reviews the language templates once; per-decision rendering is automatic.
Multilingual?
Yes, at template level.
Timeline?
Six to ten weeks after the £15k Diagnostic for the explainability layer over an existing model.
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