Part three of our vulnerable customers webinar focuses on how firms can better support customers in vulnerable circumstances.

Garry Evans, TCC’s Chief Product and Commercial Officer introduces the idea of creating “safe environments” for disclosure, leading Senior Regulatory Consultant, Juana Diaz-Landinez to explain that many customers hesitate to share their vulnerabilities due to fear or shame.

Watch as Juana emphasises the need for proactive, supportive interactions that reduce barriers and encourage trust throughout the customer journey.

Further to this, Gary Maude, TCC’s Director of Advisory Practice emphasises the importance of meaningful monitoring, quality data, and leadership engagement, stressing that firms need clear oversight and relevant metrics to understand customer outcomes and improve support.

Watch the third part here or read the transcript below:

Garry Evans:

I know there’s been a couple of mentions of safe places and safe environments so far in this webinar. What I’m thinking, Juana, if you could give us a little insight into what we mean by that.

Juana Diaz-Landinez:

So firstly, many customers don’t feel comfortable disclosing. They feel embarrassed or ashamed. They worry how the data might be used, including how it might be used against them. So really, what it’s important to do is to build a really positive disclosure environment to encourage disclosure and essentially promote the potential benefits of disclosure. Examine any barriers that you might have and look to see how you can reduce those. So whilst this may create some internal friction affecting the sales processes, where advisors have an inherent conflict of interest to get the sale through, it’s very important to make sure that there is that friction in that journey, and that you are having, well you have customers that feel comfortable coming forward.

So, requiring or expecting customers to self-identify, which is the case for a lot of firms. And then for some firms to then evidence it’s not really a reliable method for screening, as typically only a minority of customers ever disclose that they need additional support. So, it’s about being proactive and kind of moving away from expecting customers to self-identify as we know from what we discussed earlier – when we were looking at some of these stats that only four in ten customers with characteristics of vulnerability – actually disclose to their financial services provider that they have characteristics of vulnerability. The main reason being that many fear that they will receive a poorer service. So really think about how you can change that perception within your organisation. And you don’t want customers fearing that they might not be offered a product or service because of their characteristics of vulnerability.

And then just reiterating, don’t make it burdensome for customers to evidence that that they’re vulnerable. You don’t want to be in a situation where you’re potentially distressing a customer because they have to mention you know, multiple times to multiple people about their vulnerability. And then having to send them documents, chase them up. So just don’t make it very burdensome for them.

And finally, I would just say that given the transient nature of vulnerability, think about how every touchpoint with the customer right from the start is an opportunity for you to understand that customer better and to understand whether there is any potential vulnerability. So, make sure you are always looking for opportunities to discuss that with your customers and routinely contacting customers, because sometimes we only contact that customer right at the beginning. And we don’t necessarily have to stay in touch so we can miss those vulnerabilities that might come up due to life events etc.

Garry Evans:

Thanks Juana. Now, the Consumer Duty has changed the focus of supervision by the FCA from tell me to show me, meaning that having a good policy for something is now not the benchmark for compliance. Rather, it’s how you apply your policies and practice, what matters, and kind of evidence is the best way that the FCA keep returning to meaning that if you can’t evidence something, that it hasn’t happened. So, the big question now around how can you measure and report how well you manage the identification and treatment and the outcomes that vulnerable customers receive? What are your thoughts, Gary?

Gary Maude:

First of all, you’re quite right Garry. The FCA has stated more than once that they think firms are unable to, identify, monitor outcomes for customers and were needed to take action. And that’s usually due to poor quality data, an unclear escalation process and sometimes, senior leaders not genuinely engaged. And that’s where I talk about abdication versus delegation, under SMCR. And so what do we need to address that? Well, that’s where meaningful monitoring. I sometimes say to a CEO level or an MD level, if you have to put in a wall behind you, all the activity and all the controls that give you confidence in the three lines regarding vulnerable customers, what would it look like? And, very quickly, not surprisingly, it’s a tricky question.

You see people going “God, I’m not sure I’m able to articulate that holistically”. Well, as a firm, you should be able to, you should know about all the activity across the three lines because it gives you the totality. Apologies for that consultancy buzzword. The totality of your efforts and therefore how confident you should be. So that should capture all your static and thematic monitoring, your effectiveness of controls, the assessment and ongoing assessment of controls, the monitoring of risks, particularly where there’s a risk of that being outside of appetite. Don’t forget we’re driving strategy and culture down. It’s not coming up. And the other committees, the frequency of committees, the agenda of committees, the inputs, e.g. MI and the outputs e.g. what are the actions that taking place?

I think then, if I was going to move on to what is relevant MI is not a 30 second conversation is it for some people on the call. But, think about your strategy, what you’re trying to achieve. How do you test and measure success of good customer outcomes? What is that process? What goes into that? What MI do you think would measure that? Does your current range of MI metrics allow you to test for that, or do you think you need to think more broadly?

We do find quite often with MI in firms, even when it’s good MI, no one can quite remember where it came from. No one can quite remember the assumption or the desired outcome or what the MI is seeking to achieve. And therefore, when you do have narrative attached to that MI, it becomes intuitive and in the eye of the person who’s written it. So, it’s quite behavioural and personal. Juana touched upon earlier the importance of addressing multiple vulnerabilities. Historically, people have said you are vulnerable. It’s income shock. It’s a physical thing. It’s a mental thing. Or quite often there’s a whole load more to it than that in that customer’s personal story. And the plan should reflect that, i.e., that one size fits all risk and therefore ultimately does the MI you’re producing and the RAG metrics you’re producing, and the risks that you’re seeking to measure within those metrics, does it really a, allow you root cause analysis and does it allow you and your senior management team the relevant challenge and scrutiny? They need to discharge their own duties. So value or value MI exists.

Well, we’ve mentioned what risks, what cohorts. The relative value of customer insight e.g., what touchpoints are you looking to measure? What quantitative metrics do you have versus qualitative metrics, if I can say those words, what narrative do you have to interpret the data? Do you have customer feedback from customers in vulnerable circumstances? Very careful and transparent culturally with going after customer feedback. We’ve seen firms who only go after customer feedback where they know they’ve given the customer really good outcome. They don’t go after customers about a very poor outcome, say “how did that work for you and what are your thoughts on what we could do differently”?

So, there are big cultural drivers, be really mindful of contraindicators – it’s another buzzword. What I mean by contraindicators is measure things like arrears, litigation, repossessions, declined claims. These things which might allow you some insight into whether or not you’ve given good outcomes. Don’t be afraid of bad news because you will learn from it. And material versus non-material waiting is interesting. With this we find this quite commonly on QA, where firms do lots to try and measure customer outcomes, but then they get lost in weighting those outcomes, and particularly when they try to give equal weighting to what we call non-material outcomes. Did you try and establish a rapport? Did you get permission to call them by the first name? Did you find out about the kids and the dog? Very nice. Not really relevant in trying to drive what you’re trying to achieve. Then we move on to evidence. The root cause. Where did it go wrong? What could we change? Should we change? Are you using complaints? Are you using registers, are you using breaches all these things which would allow senior management to make an informed decision.

And then finally what I would say going all the way back to your point, Garry. Show me, don’t tell me what action you can demonstrate e.g. completed successful plans, customer satisfaction metrics linked back to culture and strategy committee outputs including risk committee and product governance committee, which take into account vulnerable customer findings. Does anyone look at the detailed plans for review to measure consistency and quality? Does anyone look at risk registers and actions arising, including specific vulnerable customer elements and risk register? And indeed, cohorts of vulnerable customer and is there any evidence that you have changed your products, your processes, your approach to customers as a result of the work you’ve undertaken at the MI you’ve already reviewed Back to you.

Ready to watch the rest of the webinar? You can watch the full 30 minutes below.

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