Vulnerable customers must not be an afterthought, says consultancy

“The government’s furlough scheme has been highly effective at reducing hardship. However, the scheme has not covered all individuals and outcomes; and now, with support about to be discontinued and the elimination of the £20 uplift in Universal Credit, companies across financial services will need to focus harder on supporting the vulnerable.

“Through the pandemic, financial firms have already found themselves challenged when it comes to supporting vulnerable and potentially vulnerable individuals, whether in respect to practical considerations relating to service and customer journeys or the challenges associated with designing more inclusive products.

“With an increase in the number of vulnerable customers in the UK expected to rise with the elimination of not one but two streams of Government aid, it’s imperative for financial firms to ensure that they are both properly identifying vulnerable customers and building their needs into their end-to-end customer journeys.

“Guidance on the fair treatment of vulnerable customers published by the Financial Conduct Authority (FCA) back in February [2021] was rightly welcomed as a practical step forward in addressing a number of these challenges. However, clear gaps remain. A change transformation programme will be essential to help banks, insurers, or other financial institutions apply the FCA principles to their respective customer bases.

“In this transformation process, data is firms’ most valuable asset, giving them important insights into the drivers of vulnerability and its consequential impacts. In particular, they should look to implement and track risk assessments of the potential to cause harm. This can be supported by Data Protection Officers, who can ensure GDPR standards are being met and that the required consent is given where necessary.

“Ultimately, data-driven innovation will allow a company to forge a deeper understanding of the nature and scale of vulnerability among its customers. Through a clearer understanding of individual and collective needs, they will be better placed to effect early-stage interventions as and when needed, which will ultimately drive improved outcomes for all parties.”

For more analysis read Capco’s paper Understanding the FCA’s vulnerable customer guidance

Capco is a global management and technology consultancy headquartered in London