The discussion started by looking at the definition of ‘what a vulnerable customer is’? The FCA’s definition is:
“A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”
The FCA’s guidance contains six key expectations which are designed to ensure that all customers are treated fairly, regardless of their circumstances.
- Understanding customer needs. Firms must understand the needs of vulnerable customers in their target markets and customer base. The vulnerabilities of a pension provider’s customer are likely to be different to the customer of a firm in the non-standard vehicle finance market.
- Skills and capability. Everyone has a part to play in ensuring the fair treatment of vulnerable customers. Front-line staff clearly need to be trained to identify warning signs when speaking to customers.
- Take practical action. Firms need to consider the needs of vulnerable customers in their product and service design, customer service, and communications.
- Customer service. Firms’ systems and process must support vulnerable customers to disclose their needs.
- Communications. A failure to communicate with vulnerable customers in a way they can understand may result in an increased risk of harm.
- Monitoring and evaluation. Firms should implement processes to evaluate and monitor whether the needs of vulnerable customers have been met.
The FCA has identified four key drivers that can lead to customers becoming vulnerable: Health, Life events, Resilience and Capability.
In accordance to the, FCA, it is not just about looking at the personal circumstances, but also understanding how that impacts those customers. One particular personal circumstance can impact somebody’s mental well being, it may even impact their physical well being. Coming up to winter, we’re going to see people make really difficult decisions and so chances are people maybe impacted financially, it may even impact them socially.
Everyone in an organisation has a responsibility. Every person can influence outcomes for vulnerable customers, through training and communication. Employees, need to be equipped with the right training in order to be able to have such conversations confidently and detect signs of vulnerability . Every firm has legal and regulatory obligations, which they must fulfil as well as moral, ethical and social responsibilities. These responsibilities are not only for customers but for firms to look out for their employees too and ensure they are supported in the correct way.
Want to learn more about E3’s training on ‘ Treating Customer’s Fairly ‘? Or would like to be part of these sessions? Contact us on hello@e3ct.com
