Vulnerable Customers
Every 2 to 3 years the FCA carry out and then publish the results from their ‘financial lives survey’. In their words the survey ‘helps us identify harm and respond to it. We use it to help track and monitor consumer experiences, and we make the data available for others interested in helping drive improvements in consumer outcomes.’
The latest survey was undertaken in the period from May 2022 to early 2023 and established some startling findings about consumer vulnerability, that if you are focused on delivering outstanding consumer experience shouldn’t be ignored.
The opportunity to take part in the Financial Lives Survey is offered to, in the region of, 265,000 households across the UK. With the results from the most recent survey picked up in publications like The Financial Times, The Mirror, and The Sun, and discussed on BBC & Sky News and across social media.
In this blog we will highlight some key findings and offer food for thought to help you deliver outstanding customer experiences for every customer you interact with.
What is a vulnerable customer?
A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm - particularly when a firm is not acting with appropriate levels of care.
Vulnerability is as a spectrum of risk. All customers are at risk of becoming vulnerable, but this risk is increased by having characteristics of vulnerability. These could be poor health, such as cognitive impairment, life events such as new caring responsibilities, low resilience to cope with financial or emotional shocks and low capability, such as poor literacy or numeracy skills.
Some surveys and reports estimated that as many as 53% of UK adults display a characteristic of vulnerability at some point.
What should you be looking for?
Health: Any signs that an individual has health issues i.e. physical, mental, and social well-being
Life event: Evidence that does or may disrupt an individual's usual activities, causing a change i.e. marriage, divorce, illness, or injury, and changing or losing a job etc.
Resilience: Signs of stress are being demonstrated i.e. changes of mood, agitation, lack of attention etc.
Capability: Indication that an individual has emotional, social, or relational issues
Customer Vulnerability - The Big Highlights
Things to be aware of from the ‘Financial Lives Survey’…
Adults with poor mental health:
40% said they struggled to cope with managing their money.
39% found dealing with customer services on the phone confusing or difficult.
34% were too anxious to shop around for financial products and services in case they made a mistake.
Adults with low financial capability:
47% said they felt overwhelmed and stressed when they must deal with financial matters or interact with financial services providers.
34% found dealing with customer services on the phone confusing and difficult.
15% said they have difficulty dealing with providers as they do not make reasonable adjustments for their specific needs.
If you compare findings for consumers with and without any vulnerability characteristics, how do they compare?
Financial situation Showing no signs of vulnerability Showing signs of vulnerability
Likely to have high-cost credit or loans 10% of UK adults 14% of adults with signs of vulnerability
18% of adults with poor health
21% with low financial resilience
Likely to switch financial providers 51% of UK adults 32% of adults with signs of vulnerability
Likely to be aware of the FCA 73% of UK adults with 36% aware 56% of adults with signs of vulnerability with
of the consumer helpline 24% aware of the consumer helpline
Identifying and working effectively with vulnerability
Here are 5 areas of consideration, development, or implementation that when high on your customer experience agenda will help identify, address, and work successfully with vulnerability.
Understanding Customer needs: Take the time to understand the nature and scale of vulnerability that exists in your target market and customer base.
Skills and capability: Ensure your team have the skills and capability to recognise and respond to a range of vulnerability characteristics, whilst providing your team with any practical or emotional support they may need to operate effectively.
Customer service: Make your customers aware of the support available to them, including any 3rd party or specialist services. Giving your team the flexibility to respond to your customer’s needs.
Communication: Ensure all communication is afforded the correct consideration for any vulnerability in the target audience. Offer multiple channels so that the choices are available to address any vulnerability.
Monitor and evaluate: Always be evaluating interactions with customers to identify where vulnerability has been identified, so that excellence can be recognised and improvement implemented.
Insurance Support Solutions Ltd can provide specialist support to understand where vulnerability may be, how to respond & communicate whilst also using the outputs to continuously be improving your customer experience, your team, and your business.
Ask us about what is involved, and we will work with you to provide a bespoke solution that gives you the confidence and conviction to positively impact on the customer experience.
And Finally…
X-Ray technicians make me feel quite vulnerable and exposed…it’s as if they can see right through me!
