Posted: 5th December 2017

The subject of customers in vulnerable circumstances is an area of focus which has become increasingly topical across regulated industries; particularly within the financial services and utilities sectors.

With clearer regulatory requirements set by the likes of the FCA, Ofgem and Ofwat over 2017, and a sharper eye on how firms treat vulnerable customers in general, what can firms expect during 2018? We look at five influencing factors below - and get an industry view on each of them.

The quotes in this article are sourced from the industry participants who spoke at our November event ‘Delivering Good Outcomes to Customers in Vulnerable Circumstances’. Spanning multiple sectors, attendees from regulated firms gained practical insight on a range of themes, including those covered below, to support their work in this key area.

1. Increased expectations from the regulator

It’s no surprise that regulators will be stepping up their general focus on how firms are operating when it comes to customer vulnerability. With a considerable amount of research and guidance published by regulators in 2017 (particularly in relation to financial services firms by the FCA), firms will be expected to have enough knowledge ‘under their belt’ to implement some real operational and cultural changes within their business.

“You can expect greater transparency from Ofgem on how the industry is performing with regards to supporting consumers in vulnerable situations. We will continue to highlight good - and not so good practice, so that lessons are learned.

“We will also focus on cross-sectoral approaches via the UK Regulators Network platform. We expect companies to demonstrate that their business strategy and culture captures the spirit of our rules; including the new vulnerability principle.”

Karen Dickson, Senior Policy Advisor, Customer Vulnerability Strategy at Ofgem

“2018 is the year in which energy suppliers will have to demonstrate they are being more proactive than ever before in addressing vulnerability. That means more investment in staff capacity and a review of evidence, policy and frontline practice.

“The more that suppliers can cooperate, the better for customers, and Energy UK will be doing all it can to provide that platform.”

Natan Doron, Head of Operational Policy at Energy UK


2. A greater, more detailed understanding of the ‘vulnerable customer’ population

Research carried out over the last year or two by various regulators, firms, consultancies, academic institutions and trade organisations means that, for the first year ever, there’s a more detailed, ‘complete’ view of the vulnerable customer population in the UK through the aggregated data. The challenge for firms now will come from both maintaining data quality so that it is accurate and useful, and becoming more proactive in the usage of that data when it comes to dealing with a vulnerable customer.

“The FCA has recently published its consumer approach document, as well as the findings of the Financial Lives Survey. Both documents make clear that many people are likely to be vulnerable at some point during their life. It is also clear that levels of financial literacy in the UK are a major challenge across large swathes of the population.

“The FCA’s approach, which outlines financial capability and resilience, health and life events as the key causes of vulnerability, will be helpful as insurers develop their approaches to treating vulnerable consumers.”

James Bridge, Assistant Director and Head of Conduct Regulation at the ABI


3. Economic and political factors

We can anticipate that changes and movements in the UK economy over 2018, as well as existing and future social care-related Government policies, will put further pressure on the circumstances of individual customers. There may be a discreet cultural shift; one which places greater emphasis on encouraging customers who are vulnerable to declare it to firms more often, and much earlier on in any engagement with suppliers.

“That act requires courage - and for a huge amount of trust to exist between a business and their customer. And for me, that’s something businesses need to focus on in 2018 and beyond, because without trust, consumers will struggle to be open, and businesses will struggle to meet the true needs of their customers.”

Caroline Wells, Director and Business Consultant (and former Head of Customer Insight at the FOS)

“As interest rates rise, more and more pressure will be put on UK households. This will have a significant impact on the financial resilience of the population; the FCA currently estimate that 30% have low resilience, and this is only going to worsen.

“When this is coupled with health problems, or a life event, there is significant risk of vulnerability. Firms across regulated industries need to be prepared to respond - and ensure that customers are treated fairly.”

Stephen Humphreys, Head of Propositions at Huntswood

“I expect mental health issues to increasingly rise up the agenda for both policy-makers and practitioners.”

Steve Crabb, Consumer Vulnerability Director at Centrica


4. A greater emphasis on data collection and data sharing

It will be no surprise that we’re including data as an influencing factor for 2018. Previously-collected and ongoing data collection will become even more invaluable to firms as the fields of data gathered become more sophisticated and complex. As well as the impact of the GDPR on firms (i.e. how data is collected, stored and used), there should be a positive impact in terms of data feeding into customer profiles and informing improvements in customer journeys.

In theory, effective use of different types of data should allow firms to build better customer experiences; whether that’s through digital channels, a face-to-face interaction, or on the phone. As mentioned earlier, data quality and application will also be important components.

“I'm hoping that 2018 will be the year that we make serious progress in two areas: data sharing, and more effective collaboration between suppliers and members of the health profession.”

Steve Crabb, Consumer Vulnerability Director at Centrica

“2018 will bring about an even greater focus on how consumer data is collected, stored and used. It will be important to keep the best interests of vulnerable customers at the heart of decisions”

Sarah Sargent, Director of Customer Experience at Lowell Group


5. A risk of industry participants not working together to improve

There’s a great deal to be gained for everyone in 2018 if different regulatory sectors effectively ‘pool together’ what has already been achieved and learned about customer vulnerability. Organisations which support firms and / or the regulator, such as the UK Regulators Network will have their part to play in facilitating more joined-up thinking and working between firms and the regulator.

“…the ‘industry standard’ tools that have been developed in the last decade, the recognition that this isn’t just a ‘training challenge’ but is about all those things that lie outside the training room door (QA, data analytics, product and service design), and the acknowledgement we have to do this across all channels, but in different ways. 

“The risk exists that 2018 could be a year of re-inventing the wheel, starting from scratch, and not building on what has been achieved to go even further in terms of innovation and impact.

“Consumers in vulnerable situations don’t see regulatory boundaries in their everyday lives, but are simply trying to get on top of their challenges and difficulties - which can cut across numerous providers and organisations.  We all need to remember this.  The sooner we co-ordinate our efforts on vulnerability, the better.  The sooner we share our successes and failures, the better.”

Chris Fitch, Research Fellow at the Personal Finance Research Centre (Bristol University)

“Developing a consistent and reliable operational approach to identifying and appropriately handling vulnerability is difficult, but insurers will continue to build on their existing work to support their most vulnerable consumers.”

James Bridge, Assistant Director and Head of Conduct Regulation at the ABI



It’s clear that there are still some hurdles to face before firms are in a position to attest to, and be able to demonstrate their fair treatment of customers in vulnerable circumstances. The principal challenge is the ability to identify and deal with vulnerability in a way that recognises individual needs.

Factors including organisational objectives and the structure of your operating model will drive how capable front and back office staff are at identifying and dealing with vulnerability.

Our ten proposed customer outcomes for vulnerability are a good place to start to embed this focus on outcomes for customers is a great place to start in 2018. Download our updated white paper, here.

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