Podcast ¦ RO-AR.com: Discovering Vulnerability – Leaning on Data to help

Key Takeaways

1. The data landscape is evolving significantly, particularly in collecting and aggregating consumer information to identify vulnerability.

2. Open banking and regulatory requirements have encouraged more proactive data gathering.

3. Many businesses struggle to identify vulnerable customers due to reliance on self-disclosed information, which is often underreported.

4. Data on Demand has launched Know Your Vulnerable Customer (kyvc), a product aggregating multiple data sources to help identify vulnerability.

5. Identifying vulnerability requires a multi-source approach, including credit reference agencies, mortality databases, and socioeconomic indicators.

6. The FCA estimates 50% of customers are vulnerable, but businesses typically identify only 3-10% of this population.

7. Proactive vulnerability identification can mitigate harm and improve outcomes for customers and businesses.

8. Early financial distress indicators include emergency loan applications, employment changes, and demographic factors like age and relationship status.

9. Continuous adoption of new tools and methodologies is needed to keep up with dynamic customer circumstances.

10. Regulation will continue shaping data collection and vulnerability identification approaches.

11. There is strong demand for simplifying complex data into actionable insights to enhance customer engagement and support.

12. Future analytics developments will focus on integrating new data streams to create a comprehensive view of customer vulnerability.

Key Statistics

• Data on Demand processes around 80 million UK individual records, including living, deceased, duplicated, and fraudulent entries.

• FCA suggests many businesses identify only 3-4% of their vulnerable customers.

• The kyvc product can potentially identify an additional 10 million vulnerable customers.

Key Discussion Points

1. Transition from customer self-reporting to comprehensive data-driven identification of vulnerability.

2. Regulatory focus, especially FCA requirements, for identifying vulnerable populations.

3. Combining multiple data sources to generate a holistic customer vulnerability profile.

4. Challenges due to limited self-disclosure and reliance on traditional data sources.

5. Impact of Data on Demand’s kyvc product on vulnerability identification.

6. Post-pandemic credit market evolution influencing borrowing behaviours.

7. Preparing for regulatory scrutiny regarding treatment and identification of vulnerable customers.

8. Importance of understanding early indicators and life events affecting financial stability.

9. Necessity for firms to adapt continually to evolving data environments.

10. Strategies for improved communication and support for identified vulnerable customers.

11. Role of technology and data analytics in transforming customer engagement and service.

12. Anticipated evolution of data and analytics aligned with regulatory and industry needs.

Podcast Description

In this podcast, Steve interviews Stuart Murgatroyd, CEO of Data on Demand, about the evolving landscape of data analytics and customer vulnerability identification within financial services. They discuss regulatory impacts, such as the FCA’s emphasis on vulnerable customer recognition, innovative products like Know Your Vulnerable Customer (kyvc), and the importance of aggregating diverse data sources. Stuart highlights key trends, early financial distress indicators, and challenges businesses face in adapting to this new environment, emphasizing proactive engagement to improve customer outcomes.