Research by the Financial Conduct Authority (FCA) revealed that of 10 vulnerable customers, only four of them said they had disclosed their needs to financial service providers.
However, research shows that those who are open tend to have better experiences.
Three-quarters or 74% of vulnerable customers tell the company what they say employees asked the right questions to understand their situation, 57% said their company “care” and 58% said their company took action to provide the support they needed.
The study found that vulnerable customers were more likely to report negative experience to financial services companies, such as their banks or insurance companies, than to unexplorable customers.
The FCA has issued guidance to help financial services companies support consumers in vulnerable situations in 2021 and introduce consumer responsibilities in 2023, which requires the company to deliver good results to all customers, including those in vulnerable situations.
Today, the FCA has published a review and good practice examples to further help companies provide the right care that aligns with consumer responsibilities.
“It’s hard to tell your bank or insurer about your specific needs, but those seeking help tend to feel more supportive,” said Sarah Pritchard, executive director of competition, market and international at FCA.
“We’ve seen a great example of where financial companies are making an impact on vulnerable customers, but we know vulnerable people have reported more experiences than others.”
“We want the company to build on a definite good work to help people open up and ensure they get the support they may need.”
“The term ‘vulnerability’ covers people in a variety of situations where people are facing mental health struggles, physical health problems, cognitive impairment or financial difficulties,” added Tom Selby, director of public policy at AJ Bell.
“The instantaneous nature of vulnerability means that, if not impossible, businesses find it can also be very difficult. When talking to your financial service provider, it may be the last thing you need to do in difficult times, but this research shows that doing so often has better experience.”
“The reforms that the FCA is currently considering will introduce more personalized nudges, called ‘targeted support’, have the potential to greatly improve the help and support that millions of people receive, including those with vulnerable traits.”
“It’s no surprise that customers who share vulnerability with financial service providers are so low, but it’s certainly 74% of companies feel the company is asking the right questions.
“Over the past few months, companies have been increasingly focused on using tools and technologies in their processes to identify vulnerability characteristics, and most of the time companies are pursuing the complexity and cost of adopting technology due to the nature of transient vulnerability, and have the appropriate qualified teams to provide the support they need.
“Historically, it’s hard to identify those more subtle vulnerabilities and solutions that are still needed, especially when customers are reluctant to share their personal situation.”
