It makes good business and regulatory sense to prioritise customers. Additionally, we believe that any business model ought to centre on prioritising vulnerable customers. Today in this article, we hope to assist you in improving services and achieving better outcomes with insights into vulnerable customers, pertinent risk and regulatory advice, and actionable insights.
Who is a Vulnerable Customer?
In 2015, the FCA defined a vulnerable customer for the first time as:
“Someone who, because of their personal circumstances, is particularly vulnerable to harm, especially when a company is not acting with the appropriate levels of care.”
It proceeded to recognise four vital drivers of weakness in direction distributed last year, and further made sense of:
Customers who are vulnerable may be more likely to suffer harm. This danger of harm may not always result in actual harm. However, if it does, it is likely to have a greater impact on vulnerable consumers than on other consumers.
This is ultimately about people, and there is no tick box matrix that will cover every possible combination of individual human circumstances. Insurers and brokers would be misleading if they concentrated on a precise definition.
Examining how their circumstances influence their decision-making and engagement with financial services, as well as determining the level of care they should receive to ensure that they do not suffer financial harm or distress as a result of other life events, is a more helpful way to identify FCA vulnerable customers.
Customers who are vulnerable may be digitally excluded as well as have a reduced understanding of financial products and the manner in which they are sold. They are less likely to read and respond to insurance communications as engaged customers. In the sales, renewal, and claims processes, brands should think about how various vulnerabilities translate into the best way to serve customers.
Notable Advantages of Vulnerable Customers to Businesses
Vulnerable customers might have lower comprehension of monetary items and how they are sold, the advantages and mechanics of looking at reestablishment, and they might be carefully avoided. They are less likely to read and respond to insurance communications as engaged customers. In the sales, renewal, and claims processes, brands should think about how various vulnerabilities translate into the best way to serve customers.
Financial service providers and insurers, for example, have a duty to ensure that they treat ” customers fairly and with the appropriate assistance. Weak clients are people who are considered to be more in danger of ‘disadvantage’ because of their own conditions for a scope of reasons, including present moment, long haul, or super durable profound, mental, physical, monetary or social conditions.
With the FCA clock ticking, this might seem like a difficult task. However, I advise you not to shrug off the situation.
If you would like to discuss this further, please contact me or our helpful client partner team.
The Mema consultants’ team is putting a special emphasis this year on assisting our client in developing inclusive design practises and expanding their knowledge of vulnerable customers as well as fully understanding FCA’s Business plan. Please get in touch with us.