As consumer vulnerability continues to make strong headlines and remains a key focus in regulated industries, there is growing pressure on financial services organisations to improve experiences and outcomes for those most vulnerable, whose needs aren’t necessarily being met by standard legislation.
In line with a steady stream of research published over the past twenty years, regulatory bodies have begun, in recent years, to consider vulnerability in its entirety and the challenges presented to ‘everyday’ people; recognising vulnerability as a non-discriminating set of circumstances.
To put these vulnerabilities into context:
- Over 300,000 people in the UK are diagnosed with cancer every year.
- Every day, 1,121 people are made redundant from their jobs.
- In 2017, the provisional number of deaths registered in the UK was 607,172, affecting those people around them.
- 1 in 4 people are believed to be living in the UK with a mental health issue.
- With an aging population, 1 in 4 of us is expected to be aged 65 and over by 2050
In reality, such circumstances described are likely to affect all of us, and those around us, during our life stages and customer journeys. The level of vulnerability this places a person under depends largely on individual resilience and capability for coping with a particular challenge, at a given time. A person can move in and out of vulnerability, intermittently, with overlapping effects, such as, bereavement and stress, with stress leading to ill-health. Therefore, we must consider vulnerability as ever-changing and contextual by nature, requiring firms to adapt more flexibly and readily to individual needs.
With this understanding, the financial services industry has formed partnerships with charities and consumer groups to launch the ‘Financial Services Vulnerability Taskforce’, addressing ways in which institutions can improve vulnerable customer experiences. One key Taskforce recommendation is around how firms communicate with those most vulnerable.
Communication is a vital strategy in defining, building relationships with and supporting vulnerable consumers. While a number of important and valuable articles have been published on this subject, they have largely focussed on supporting incoming channels. For example, inbound call centres and financial advisors. Attention towards outbound communication has not been so widely discussed, despite there being a number of key considerations.
Getting the right message across at the most appropriate time, along with suitable delivery methods helps create tailored communications to the right audience. With growing demand for personalisation and engaging content, customers have come to expect more. This provides an opportunity to transform transactional communications to customers with varying and individual needs, rather than attempting to standardise templates aimed at ‘vulnerable’ customers.
The UK Finance highlights the need for firms to offer multi-channel communication preferences, which may change during the customer’s experience; emphasising the need for alternative flexible choice, in spite of digital adoption. The use of video or graphical and interactive mediums, alongside traditional means of disclosure, can help make information clearer and appear less complicated through a combination of auditory and visual messaging. Generic and content-heavy material, product complexity and processes involving multi-stages can all be overwhelmingly difficult for customers. Helping those through challenging times (for example, during the bereavement process) can assist customers to overcome difficulties by firms applying an ‘outside-in’ empathetically designed and personalised approach to communications.
The Ageing Population and Financial Services occasional paper published by the Financial Conduct Authority (FCA) cites that technical language and jargon can make financial products and services difficult to understand, for example, pensions and retail collective investment schemes. This can result in people not necessarily making informed decisions about their financial planning. Respondents to the regulator’s discussion paper argued that information provided to elderly consumers should be direct, simple and highlight key messages. Alongside the findings of the Ageing Mind Report, this could help deliver understandable information and support informed decisions.
Under the Equality Act, organisations should provide communications accessible to customers with disabilities on request, including: large print, audio and braille transcriptions, across all literature and correspondence types. This should be delivered in ways that meets legislative standards for security of personal information and agreed quality of service, without compromise or disadvantage to a particular group of consumers.
Where requests are met in line with consumer requirements, non-disclosure of vulnerability means firms need to use different methodology. Some customers have shared their reasons for non-disclosure as a belief that larger firms will not act with any real intention. In the reverse, where customers interact in more localised environments, such as, high street branch networks, there can be a reluctance to disclose a vulnerable status due to the fear of disclosure to a wider community. This presents a particular challenge to organisations.
Insight and prevention
The Data & Marketing Association (DMA) suggests the use of data-driven behaviour analysis and ‘single customer views’ to drive insight into reasons behind consumer behaviours, using customer ‘single-view’ profiles to identify those most vulnerable cross-products, services and systems. Irregular behaviours can act as warning signs for safeguarding measures to be applied, including: regularly changing payment instructions or changing address multiple times in a relatively short period. The use of automated data analysis can help to identify and drive out targeted interventions and communications appropriately, without labelling or stigmatising people. This is a particularly important step because many people will never truly identify as vulnerable, so any chosen approach needs careful consideration.
A further pre-emptive step involves the foresight of potential vulnerability, such as, during macro-economic changes, which can have detrimental effects on particular groups of people. Those in the consumer credit market will likely be affected directly during recession periods and interest rate increases, requiring assistance and potential follow up periodically; particularly where an event has triggered a rapid response to inform customers of statutory legislation change. The FCA’s ‘Financial Lives Survey’ cited that just under a third (30%) of UK adults are characterised by having low financial resilience. Therefore, communicating support to those most vulnerable, or likely to face potential vulnerability from financial change, forms an important step towards preventing further vulnerability and ensuring customer well-being.
Overall, managing vulnerability is an ongoing challenge for all firms, requiring constant reassessment and sharing best practice cross-sectors, such as, with Utilities and Telecoms firms and their regulators. With increasing customer expectations and vulnerability firmly embedded in the regulators’ business plans, firms cannot afford to stand still. Those that can set themselves apart with value added and engaging communications will go a long way towards retaining their vulnerable customers, not only within their own organisation but within the regulated sector in which they operate. In the end, the most customer-centric of firms will likely innovate in their practice to ensure consumer outcomes are met with positive experiences throughout all stages of the customer journey.