Summary of the FCA webinar following their review of firms processes for customers in vulnerable circumstances.
https://webinars.fca.org.uk/the-vulnerability-review-findings/join
Summary:
The FCA outlined their findings from a review on how firms are supporting consumers in vulnerable circumstances, building on their 2021 guidance. The review includes insights from firms, consumer research, and expert consultations, exploring how vulnerability is being addressed across various dimensions of financial services. The report also highlights areas where further improvements are needed, such as better product design, more effective outcomes monitoring, and greater integration of vulnerability considerations throughout firms’ operations.
Key Takeaways:
- Progress: Many firms are making meaningful improvements in supporting vulnerable customers, particularly in response to the Consumer Duty.
- Vulnerability is Dynamic: Identifying and addressing vulnerability requires continuous adaptation as needs evolve.
- Training and Empowerment: Effective training, especially around empathy and vulnerability identification, is crucial for staff to respond to customers’ needs.
- Proactive Support: Tailored support for vulnerable customers, such as personalised communication and flexibility in processes, has led to better customer outcomes.
- Challenges in Product Design: Few firms have successfully integrated the needs of vulnerable consumers into their product design processes.
- Monitoring Outcomes: Many firms still lack effective systems to track and act on the outcomes experienced by vulnerable customers.
- Technology’s Role: While digital solutions can improve service, they must be accessible, and firms should offer non-digital alternatives to meet the needs of all customers.
- Importance of Data: Effective data collection, particularly granular data on vulnerable customer cohorts, is essential for improving service and outcomes.
- Governance and Accountability: Senior leadership must prioritise vulnerability issues to ensure lasting cultural change within firms.
- Consumer Feedback: Real-life consumer experiences are invaluable in shaping effective practices and policies.
Innovation:
- Empathy Training: Firms are using external partnerships to improve empathy training for staff, helping them better understand and respond to vulnerability.
- Data-Driven Adjustments: Some firms are using customer feedback and data analytics to monitor outcomes and refine their service offerings, ensuring that vulnerable customers receive appropriate support.
- Tailored Communication: Firms have implemented adaptive communication channels (e.g., text updates for claim progress, dark mode in applications) to meet the needs of vulnerable consumers.
Key Statistics:
- 29% of firms do not test their products or services for vulnerability-specific needs.
- 40-65% of consumers reported that digital services do not meet their needs.
- 50% of the population may display vulnerability characteristics, which need to be accounted for by firms.
Original: LINK
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