Posted: 2nd March 2016

This article was originally published on the BBA’s website.

Currently, according to our industry research, only just over half of firms surveyed have a clear policy for dealing with vulnerable customers.

Ultimately, success in this important area isn’t just a compliance consideration, it’s also core to commercial success. So ask yourself, where is your firm in its thinking on vulnerability?

2015 saw the topic of vulnerability rise up the regulatory agenda. The FCA was undoubtedly looking to get vulnerability into the hearts and minds of financial services firms; we were given an occasional paper and a consumer study to highlight the issue. A large percentage of the industry reacted by forming the ‘Financial Services Vulnerability Taskforce’ – launched in September to look at improving the experiences of vulnerable customers.

Where does the industry stand?

According to our engagements with firms, as well as our industry research which looked at how businesses view and deal with the matter of vulnerability:

  • Vulnerability is high on many firms’ agendas especially since the regulator intensified its focus on this topic. Specifically, 57% of the firms we surveyed saw how they deal with vulnerable customers as highly important
  • Yet, many of these businesses are still only at the beginning of developing their approach, as well as defining what vulnerability means in the context of their organisation:
    • -47% of firms still do not have a clear policy for how they deal with vulnerable customers
    • -93% of firms either have no specific staff training for vulnerability or they rely on general training and competence schemes to deliver the necessary skills to the frontline

Adopting a bottom-up and top-down approach

How vulnerability is handled by firms predominantly falls at the feet of frontline employees, and their key challenge is their ability to identify and deal with vulnerable customers in a way that recognises individual needs.

When you think about it holistically, for this to happen, senior management need to be engaged with a firm’s desired outcomes. Moreover, a firm’s strategy, culture and business model must be aligned to these outcomes, tailored to its customers, and ensure that the key benefits are delivered.

But what are these outcomes?

In our Vulnerable Customers white paper, we’ve analysed the FCA’s identified customer needs, and adapted these into 10 measurable firm orientated outcomes:

1. Product

Products are clear and easy to understand, containing no surprises that only become apparent when a crisis strikes

2. Communication

There is a choice of ways for customers to communicate

3. Tailored approach

Customers are treated as individuals, with tailored responses according to their circumstances

4. Judgement

Staff have the authority and discretion to offer flexible solutions and outcomes where appropriate

5. Fair disclosure and information usage

Customers are encouraged to be open and honest, safe in the knowledge that the information they give will only be used in their best interests

6.Tell once

Information regarding customers’ circumstances is recorded properly to prevent them having to repeat themselves

7.Proactive forbearance

Proactive contact is made with customers in the event of suspected financial difficulties


There is vigilance for signs of suspicious activity that may indicate abuse or fraud on a customer’s account


Carers for vulnerable customers are treated with respect and their concerns noted, whilst data security is still maintained

10.Third parties

There is consistent and fair treatment of the recently bereaved, or those acting with Power of Attorney or a third party mandate

In its practitioners’ pack, the FCA recommended that firms start looking at vulnerability in their business by means of a comprehensive gap analysis. Have you completed yours?

If not, then these 10 outcomes form the basis of Huntswood’s vulnerability healthcheck. The healthcheck diagnostic tool captures all elements of vulnerability and demonstrates delivery of fair customer outcomes, whilst ensuring firms are not in danger of slipping into the common pitfalls identified by the FCA. Where this is not the case, we pinpoint gaps in your approach and make recommendations for change.

Download our white paper for further information on embedding real change within your firm and contact us to find out more about our vulnerability solutions:

Find out more in Huntswood’s vulnerability white paper.

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