9th February 2022
How to help vulnerable customers in regulated industries
Research shows that since the onset of the pandemic, more consumers are at risk of becoming vulnerable and at greater risk of harm. So how can firms operating in regulated industries better find, support and protect vulnerable customers?
How does your organisation define vulnerable customers? The Financial Conduct Authority (FCA) says: "A vulnerable customer is someone who, due to their circumstances, is especially susceptible to harm — particularly when a firm is not acting with appropriate levels of care."
The FCA goes on to point out that any customer may be at risk of becoming vulnerable, and therefore find themselves at greater risk of harm—an observation that's borne out by its own 'Financial Lives survey. Between February 2020 (just before the pandemic) and October 2020, the number of adults with characteristics of vulnerability rose from 24m to 27.7m. That means more than half (53%) of UK adults display at least one vulnerability characteristic, with the largest proportional increase being among younger adults (aged 18–34) and the self-employed.
As well as leading to an increase in low financial resilience (owing to redundancy or reduced working hours), the pandemic has also had a significant impact on people's mental health. In October 2020, 18% of adults reported a mental health vulnerability, up from 12% in February.
So what do these rising levels of vulnerability mean for financial services firms, utilities, and other companies operating in regulated industries? What do they need to do to identify vulnerable customers better and provide them with the right support? And what impact can fairer treatment of vulnerable customers have on their business?
Care, compassion, consistency
Companies must comply with industry standards and regulations relating to identifying and supporting vulnerable customers. While some individuals may self-identify as vulnerable, others may contact you for help without realising they're in a vulnerable situation.
Organisations, therefore, need to equip your contact centre and other customer-facing staff with the skills to identify vulnerable customers. This involves training them on the processes they need to follow—including what questions to ask, correctly recording the responses, and what actions to take.
A caring and compassionate approach is important, as is consistency. Regulators will often look for consistency as a sign of how well a company meets its obligations. A case management solution like iCasework can be a valuable support - its specially designed module underpins identification and management of vulnerable customers with a guided workflow. The module:
- provides standardised questions to enable identification and evaluation of vulnerable customers
- comes pre-configured with a range of vulnerability categories
- incorporates standard codes used when assessing people's needs and status
- includes a range of assessment models
- allows you to set up review schedules, for example to check in periodically with a vulnerable customer to find out how they're faring as they recover from a serious illness
- supports your compliance management.
The module integrates seamlessly with the iCasework platform and its range of solutions, including Complaints and Feedback Management. Ready to use ‘out of the box’, it can also be customised according to your business rules and practices or industry-specific requirements.
Good news for your customers and your business
Once you can reliably identify vulnerable customers, you can treat them appropriately and comply with industry requirements and recommendations. This may mean:
- offering a customer with low financial resilience a more affordable payment plan
- roposing a payment holiday to a customer experiencing a new life event
- communicating with a hearing or visually impaired customer in the way that's best for them.
And with a solution like iCasework that provides comprehensive reporting, you'll be able to use what you learn about your vulnerable customers to:
- refine sales and marketing approaches to help you avoid targeting them with inappropriate offers
- make future product and service design more inclusive
On top of that, dealing fairly and compassionately with vulnerable customers can help to increase consumer trust in your organisation ?firm — potentially leading to a more loyal customer base, an enhanced brand image, higher volumes of referrals, and an improved bottom line.
Get ready for the FCA's consumer duty
The planned 2023 introduction of the FCA's consumer duty — designed to create a higher level of consumer protection — makes this the ideal moment to review your approach to identifying and supporting vulnerable customers and evaluate the technology that can help you do it even better.
To find out more about the iCasework case management system and its new customer vulnerability module.