This research doucment comissioned by the FCA to gather feedback from consumers around treatment from firms when in vulnerable circumstances. It was includes as part of their review into treatment of vulnerable customers. Summary below.
https://www.fca.org.uk/publication/external-research/vulnerability-review-improving-outcomes-consumers-engaging-financial-services-firms.pdf
Key Take Aways
- Consumers with multiple characteristics of vulnerability are more likely to report poor outcomes compared to others.
- Disclosure of vulnerability often leads to positive outcomes, but barriers to disclosure remain, such as concerns about receiving worse service.
- The interaction between multiple characteristics of vulnerability can increase susceptibility to harm and make experiences with financial services providers more negative.
- Tailored, flexible support and personal communication are key drivers of positive outcomes and trust.
- Standardised, impersonal approaches can lead to poor communication and negative experiences for vulnerable consumers.
- Consumers in vulnerable circumstances are less likely to easily access suitable financial products and services.
- A significant proportion of consumers in vulnerable circumstances have been turned down for products they felt were suitable for their needs.
- Lack of awareness about available support and communication options is a common barrier to achieving positive outcomes for vulnerable consumers.
- Negative communication experiences can significantly undermine trust in financial services providers, especially for vulnerable consumers.
- Trust is strongly linked to the perceived empathy and quality of communication from providers.
- Positive experiences over time can build trust, whereas poor communication experiences can erode it.
- Financial services firms are encouraged to consider how they can improve communication and ensure tailored support for vulnerable consumers.
Innovation
- The study encourages a shift from standardised communication to more personalised, empathetic interactions with vulnerable consumers.
- Firms are urged to focus on proactive, tailored support, such as regular check-ins or personalised advice, to build trust and ensure better outcomes for vulnerable customers.
Key Statistics
- 25% of consumers with characteristics of vulnerability reported being turned down for a financial product or service they felt was suitable for their needs.
- 74% of consumers who disclosed their vulnerabilities to their financial services provider reported that the provider asked the right questions.
- 58% of consumers who disclosed their vulnerability said the provider made changes to accommodate their needs.
- A significant proportion (58%) of consumers with communication issues reported they were unaware of alternative communication methods available to them.
Key Discussion Points
- Vulnerable consumers who disclose their circumstances generally receive better support, but barriers to disclosure such as fear of receiving worse service persist.
- The complexity of multiple vulnerability characteristics can lead to worse outcomes for consumers.
- Tailored support that responds to the unique needs of vulnerable customers helps increase trust and improve communication.
- Negative experiences with financial service providers, particularly regarding communication, can severely impact vulnerable consumers’ trust and mental health.
- There is a lack of awareness about the support and alternative communication methods available for vulnerable consumers.
- Many vulnerable consumers face challenges accessing appropriate financial products and services.
- The interaction of multiple vulnerability characteristics can exacerbate the difficulties vulnerable consumers face.
- Financial services providers must improve how they communicate rejections and support vulnerable consumers in making decisions.
- Trust is highly influenced by the quality and empathy demonstrated in communications with financial service providers.
- Standardised approaches to communication may contribute to poor experiences for vulnerable consumers.
- Proactive engagement, such as offering regular check-ins or personalised assistance, is crucial to meeting the needs of vulnerable consumers.
- Consumer trust is more likely to be established when financial firms take time to understand and address the specific needs of vulnerable individuals.
Description
This report, commissioned by the Financial Conduct Authority (FCA), explores the outcomes experienced by consumers in vulnerable circumstances when interacting with financial services firms. It aims to highlight areas where vulnerable consumers face worse outcomes compared to others and the positive and negative practices that influence these outcomes. The research finds that tailored, empathetic communication significantly improves consumer trust and outcomes, while impersonal, standardised processes often exacerbate vulnerability. The study provides recommendations for firms to improve how they engage with vulnerable customers to ensure better support and outcomes.
Original: LINK
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