Summary
What this article covers in 30 seconds
- Over one million more customers met the criteria for vulnerability than two years earlier; 47% of UK adults had one or more characteristics in May 2022.
- Mounting bills, rising food prices and soaring energy costs have deepened financial hardship, which is why the Consumer Duty emphasises protecting the most vulnerable.
- Vulnerability can affect anyone at any time in their customer journey, so firms need a reliable process to identify it and evidence fair treatment.
- The FCA has cited embracing AI as one solution, and Quality Assurance teams can implement RegTech to great effect on vulnerability challenges.
- Conversation Intelligence now offers a feature aligned with firms’ own vulnerability QA policies, applying a consistent approach to vulnerability identification and assessment.
The circumstances we’ve faced, not only in this country but also globally, over recent years can seem almost unreal when we take a moment to look back.
From the Covid pandemic to the current cost-of-living crisis, these truly challenging times show no sign of reprieve for many as we move into 2023.
Testing times
Such challenges have unfortunately led to an increase in the number of consumers with characteristics of vulnerability – with over one million more customers meeting the criteria than two years earlier. The Financial Lives 2022 survey showed that 47% of UK adults had one or more of the characteristics in May 2022, likely due to an increase in the number of UK adults with low financial resilience.
And in real terms, the cost-of-living crisis has left many households facing mounting bills, increasing food prices and soaring energy costs – which has only exacerbated the strain on people’s purse strings and left many facing financial hardship.
So, it’s clear to see why the FCA’s Consumer Duty is placing such emphasis on providing good outcomes for customers and protecting those that are most vulnerable.
Effective evidencing with AI technologies
Having a reliable process in place to identify which of your consumers show signs of vulnerability – bearing in mind that this can happen to anyone at any time throughout their customer journey – has never been more important.
But how can firms effectively demonstrate this and evidence fair treatment of vulnerable customers? Well, the good news is that the FCA has already cited one solution in a recent speech: embracing the use of AI.
Quality Assurance teams can implement RegTech to great effect when addressing the challenges of vulnerability.
New feature to address vulnerability challenges
Recordsure’s unique Conversation Intelligence product – founded on intelligent speech analytics – now offers a new feature that aligns with your own internal vulnerability QA policies and processes. Combining speech analytics and machine learning with the latest technology, you can apply a consistent approach to vulnerability identification and assessment and transform your firm’s support for vulnerable customers.
Under the Consumer Duty, the FCA will increasingly be asking for data focused on consumer outcomes, with the fair treatment of vulnerable customers high on its checklist – so firms will need to maximise the oversight of all their customer interactions, with a particular focus on how they are assessing vulnerability.
Frequently asked questions
The FCA’s Financial Lives 2022 survey showed that 47% of UK adults had one or more characteristics of vulnerability in May 2022 – with over one million more customers meeting the criteria than two years earlier.
Challenges from the Covid pandemic to the cost-of-living crisis have increased the number of consumers with characteristics of vulnerability and left many facing financial hardship. The Duty places emphasis on good outcomes for customers and on protecting those that are most vulnerable.
The FCA has cited embracing the use of AI as one solution. Conversation Intelligence combines speech analytics and machine learning so firms can apply a consistent approach to vulnerability identification and assessment, aligned with their own vulnerability QA policies and processes.
It will increasingly ask for data focused on consumer outcomes, with fair treatment of vulnerable customers high on its checklist. Firms will need to maximise oversight of all their customer interactions, with a particular focus on how they assess vulnerability.