The Financial Conduct Authority is encouraging vulnerable customers to open up to financial services firms to get the right support.
Research by the regulator has found that just four in 10 vulnerable customers (42%) have opened up to their financial services provider about their personal circumstances
However, the FCA’s findings have also shown that those who do open up tend to have better experiences. Three quarters of vulnerable customers who told their firm about their circumstances (74%) said that staff asked the right questions to understand their situation, 57% said their firm “cared”, and 58% said their firm took action to provide support they needed.
According to the data, vulnerable customers are more likely to report a negative experience with financial services firms (44%), such as their bank or insurer, when compared to non-vulnerable customers (42%).
The FCA issued guidance to help financial services firms support consumers in vulnerable circumstances in 2021 and introduced the Consumer Duty in 2023, which requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances.
Today, the FCA has published a review and good and poor practice examples to further help firms provide the right care consistent with the Consumer Duty.
“It can be hard to tell your bank or insurer about your specific needs but those who ask for help tend to feel more supported,” FCA executive director, competition, markets and international, Sarah Pritchard. “We’ve seen good examples where financial firms are making a difference for vulnerable customers, but we know that vulnerable people report more negative experiences than others.
“We want firms to build on the good work identified, to help people open up and make sure they get the support they may need.”
Director of public policy at AJ Bell, Tom Selby, commented that reforms currently under consideration by the FCA which would introduce more personalised nudges, known as “targeted support”, have the potential to “drastically improve” the support that millions of people receive.
“Firms will design interventions under targeted support based on common characteristics of ‘people like you’, utilising data on cohorts of customers to inform the nudge,” added Selby.
“Being honest about any potential vulnerabilities you have will be critical here too, as the more a firm knows about your circumstances, the better targeted its suggestions will be.”
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