For the past few years, the regulator has been tirelessly working to make protecting vulnerable customers a major priority of the financial services agenda. And given the context, that’s no surprise.
Since 2020, the country has endured the COVID-19 pandemic – which rendered millions unable to go to work – and is now grappling with a meteoric rise in the cost of household energy, petrol and daily essentials.
Indeed, for many across the UK, the new decade has seemingly presented one financial challenge after another. And with inflation heading towards 10% this year – whilst workers’ purchasing power has fallen compared to last year as pay rises fail to keep up – it’s unlikely that the crisis will be resolved anytime soon.
As a result, businesses will need to be well prepared for the influx of consumers approaching them for help with their finances.
But not only that: now more than ever, it’s crucial firms go the extra mile to check up on their customers’ situation – and ensure that those facing hardship are treated with respect, patience and compassion.
How should firms respond?
In times of crisis, it goes without saying that truly knowing your customer is paramount to safeguarding them from any course of action that could further hamper their financial health.
Advisers should remain cognisant of the ‘relationships of trust’ guidance surrounding Principle 9 of the FCA Handbook – and be extra diligent to uncover any emerging risk factors during the discovery process. After all, previous vulnerability calculations can quickly be rendered obsolete when the economic situation is worsening for many by the day.
When it comes to complex decisions, it’s vital you do all you can to empower customers to make their own well-informed choices by clearly explaining the pros and cons of all options open to them. Ensuring that your advisers are well-versed in compliance and conduct – and apply the best practice to their day-to-day interactions with customers – neatly ties into the directives laid out in the incoming Consumer Duty, which puts clear communication and providing choice at the heart of client interactions.
And you should make sure that vulnerable customers are getting the care and support they need by verifying individual clients’ risk factors and vulnerabilities are properly communicated between departments.
If you haven’t already, it may also be worth looking into how speech and document analytics technologies can help you ensure process adherence, and recognise emerging risks – as well as provide a robust audit trail to evidence that you’re complying with your responsibilities to vulnerable consumers.
Recordsure speech and documents analytics RegTech provide regulated industries with market-leading AI-driven tools specifically designed to enable organisations to deliver compliance, conduct and fair customer treatment.