Many UK banks are ill-equipped to comply with new codes on consumer debt management, according to technology consultancy Detica.

The new UK voluntary Banking Code puts the onus on banks and building societies to provide more support to consumers heading into debt problems, including identifying and contacting those who may be at risk.

However, Detica believes that inefficient and outdated management and analysis of customer data means that the majority of UK retail banks are not equipped to identify these customers under the new requirements.

"The stream of recent regulatory requirements means that banks actually have a great deal of data in place to build an accurate profile of their borrowers," said Maggie Scott, executive manager at Detica's Financial Services unit.

"Historically, however, banks have only used this data to assess their customers' financial circumstances when applying for credit."

Scott warned that the challenge now is for banks to apply this intelligence to identify financial stress and to get in touch with customers to discuss ways to support them.

"If banks cannot do this, consumers will not benefit from the aims of the new Code and we risk debt spiralling further," she said.

Detica has urged banks to take a closer look at individual customer trends to help identify those who are falling into debt before it becomes a serious problem.

Scott pointed out that credit cards, for example, are often the first to show signs that a customer is getting into difficulties.

A customer increasing cash withdrawals, while reducing monthly repayments to a minimum, is a strong indicator that he or she is struggling to meet their financial commitments.

"The new Banking Code should compel banks to look again at their responsible lending policies and how to translate them into action," concluded Scott.

"The benefits are twofold: customers receive the support they need before it's too late, and banks can reduce the level of debt that turns bad."