Aptean Respond eBook: Customer Vulnerability - Putting Guidance into Practice (EN-GB)

Introduction

The guidance issued by the UK’s Financial Conduct Authority (FCA) on vulnerable customers has brought a renewed focus to a much-discussed issue. The global pandemic has served to shine an even brighter spotlight on customer vulnerability following a dramatic upsurge in the number of vulnerable people in society, with FCA research from October 2020 finding that the COVID-19 pandemic had left 27.7 million UK adults with characteristics of vulnerability, up 15% from the previous survey in February 2020.

In light of the FCA’s February 2021 guidance, the onus is now on businesses and organisations to fulfill their obligations, driving positive change and supporting vulnerability within the customer experiences they provide. Using the six key areas outlined by the FCA as a framework for vulnerability best practice, with the right combination of people, processes and technology, organisations can certainly achieve this, treating all customers fairly and demonstrating a robust and effective response to a very pressing issue.

We’ve brought together a host of industry experts to discuss how the FCA guidance can and should be applied. Examining the different steps organisations need to take, this eBook outlines how it’s possible for businesses to support customer vulnerability at every step of the customer journey.

1. Understanding Customer Needs

“The needs of vulnerable consumers in a firm’s target market or customer base are likely to vary and will often require additional measures to ensure good outcomes.”

FG21/1 Guidance for firms on the fair treatment of vulnerable customers

Never has it been more important to completely understand customer needs. Only by doing this can businesses and organisations respond accordingly. It’s crucial that firms know their target market and their customer base too, being fully aware of any sector-specific vulnerabilities and putting the processes in place to guide frontline workers and case managers through targeted information capture and case management processes based on individual customer need. In addition to the FCA’s broad definition of vulnerability, organisations should be making use of their own data to better understand the characteristics present in their vulnerable customers.

Cheryl Hannon, a Director at KPMG, works with clients to help them in their approach to identify and evidence fair treatment of vulnerable customers from their customer base. She supports firms to look at which harms may be prevalent and how firms might need to adapt their products and services to accommodate vulnerable customers. She says, “Vulnerability is changing to be more complex and fluid than ever. This means firms can no longer just rely on identifying vulnerable customers through customer declaration alone and relying on binary system flags to manage vulnerability. Firms need to be using existing data they hold on customer performance, customer experience, product performance and operational performance to support the identification of customers who are, or could, suffer from actual or potential vulnerabilities. It’s also important for firms to consider how their own products, processes, pricing and operations can cause vulnerability in customers – and put in place controls and support to mitigate it. Historically, firms have been typically weak in designing and articulating what treatment strategies and support is available to customers and this should be an area of focus for firms in the near-term future.”

Lastly the impact of a given vulnerability needs to be understood; not every characteristic of vulnerability will have an adverse impact in every situation. For example, while dyslexia can have an impact, it’s a spectrum and, in a given context, may not play a significant role in a customer making an informed decision.

“Vulnerability is changing to be more complex and fluid than ever. This means firms can no longer just rely on identifying vulnerable customers through customer declaration alone and relying on binary system flags to manage vulnerability. Firms need to be using existing data they hold on customer performance, customer experience, product performance and operational performance to support the identification of customers who are, or could, suffer from actual or potential vulnerabilities.”

Cheryl Hannon, Director, KPMG

2. Skills and capabilities

“It is important for firms to recognise the role that staff play in meeting the needs of vulnerable consumers. These consumers are more likely to suffer harm when staff do not understand how vulnerability is relevant to their role, or if frontline staff do not have the skills and capability to recognise and respond to their needs.”

FG21/1 Guidance for firms on the fair treatment of vulnerable customers

One of the most important aspects of any efforts to deliver customer vulnerability best practice is to ensure staff have the right skills and capabilities to not only recognise vulnerable customers but to respond effectively and appropriately to their needs. The FCA wants all areas of the front line to be informed about vulnerability, with customer service professionals well-placed to be the advocates for vulnerable customers in your firm.

Helen Pettifer, Vulnerable Customer Consultant and Trainer, identifies which skills and capabilities organisations should be nurturing across their workforce. She says: “In my opinion, it’s all about soft skills and emotional intelligence. These include active listening, showing empathy and understanding emotions and behaviours. We’re now in a new era of customer service – ‘The Human Experience’. We need to be connecting with individuals – whether that be customers or colleagues – on a human level, through emotionally intelligent responses. Organisations need to be recruiting for these skills. Technical and system skills can be taught on the job, however recruiting team members that can naturally emotionally connect with people is critical, especially those individuals in need or at crisis point.”

“When it comes to the training of staff, organisations must be delivering regular vulnerability training. Firms might also consider creating specialist teams who are skilled and confident in managing more challenging situations and conversations around issues such as bereavement, dementia and mental capacity, suicidal conversations and mental health.”

“It is important for firms to recognise the role that staff play in meeting the needs of vulnerable consumers. These consumers are more likely to suffer harm when staff do not understand how vulnerability is relevant to their role, or if frontline staff do not have the skills and capability to recognise and respond to their needs.”

Helen Pettifer, Vulnerable Customer Consultant and Trainer

3. Product and service design

“Where firms design products and services that do not take into account the needs of vulnerable consumers in their target market and customer base, there is a risk that these consumers can suffer harm as their needs may not be met from the start.”

FG21/1 Guidance for firms on the fair treatment of vulnerable customers

It’s not just customer interactions and communications that need to take customer vulnerability into account. The very products and services offered by organisations should reflect any specific types of risk relevant to particular marketplaces.

For example, several banks have introduced optional blocks on payments to gambling firms to help consumers who would benefit from greater control of their spending on gambling. These banks have considered the needs of vulnerable consumers in their target market and worked to support them through their product design. They have empowered consumers who may have a gambling addiction to take control. This is also an example of inclusive design.

On the other hand, consider a bank which fails to respond to a request from a consumer who cannot work due to complex posttraumatic stress disorder asking if they can place a limit on her cash withdrawals. An episode of poor mental health then results in the consumer spending all her Universal Credit benefit at once, forcing her to report to a local charity for two consecutive weeks requesting food bank vouchers as she does not have enough money to eat. This firm was inflexible in its approach to vulnerability, failing to understand and respond to a customer’s needs leading to consumer harm.

In order to treat vulnerable customers fairly, it is vital that firms fully understand both their target market and customer base.

Jonathan Mantle, Consultant and Founder of Complaints EQ looks at how organisations can ensure this is the case. He says: “From a complaints perspective, one of the biggest blockers – particularly for vulnerable customers – is the ease of access. Being able to communicate with firms through a variety of channels, the clarity and prominence in which contact details are given and being able to raise any concerns at the chosen ‘point of entry’ is very important – as is being able to follow-up in the same way.”

“Expecting customers to repeat themselves through another channel or to another team after they’ve taken the time telling the first person risks them giving up and, consequently their needs are unlikely to be met. You also risk losing important information the second time around, not to mention the regulatory failings of this practice.”

“Cross-team alignment is another issue; for example, a customer calling to ask what’s going on with their complaint, only for the agent to say they have no information about it and can’t access it. Basic access to show the left and right hand know what the other’s doing can make a huge difference in customer perception. If no one but the complaints team can tell me what’s going on with something as important as a complaint, I have little confidence the firm shares other important information very well – or worse, that the problem won’t happen again.”

“So, the key is – if you have multiple channels, you have multiple channels. Don’t push customers down a specific route. Make sure all your contact details are prominent and easy to find. Reference them on your website and in all communications. If a complaint is received, it’s received. Don’t put the onus on the customer trying to reach a specific team or person. Your process should allow you to transfer the issue, not the customer – unless they ask. Make sure staff can access and share information. Whoever the customer reaches out to is a good indicator of their preference or what they find easier or most comfortable. Unless there’s some strict legal or regulatory reason why a certain department needs to work in silo, there’s no excuse.”

Guidance

Practice

“From a complaints perspective, one of the biggest blockers – particularly for vulnerable customers – is the ease of access. Being able to communicate with firms through a variety of channels, the clarity and prominence in which contact details are given and being able to raise any concerns at the chosen ‘point of entry’ is very important.”

Jonathan Mantle, Consultant and Founder, Complaints EQ

4. Customer Service

“Vulnerable consumers are more likely to have different service needs. For example, they may find some channels of communication challenging or stressful or need more time to understand information and make decisions.”

FG21/1 Guidance for firms on the fair treatment of vulnerable customers

Organisations are faced with the challenge of how to proactively identify vulnerable customers, as well as working out how best to engage with those already identified as vulnerable. Additionally, how can organisations optimise engagement with vulnerable customers, accurately capturing their needs and supporting them to prevent any further detriment?

Robust vulnerability detection has to lie at the heart of any vulnerability measures, helping to protect against harm by capturing and responding to specific customer need.

It’s often only by building up a picture of customer behaviour that vulnerability can be properly identified. A one-off incident might not be enough to sound the vulnerability alarm, but if employees are armed with a full customer history, key signs of vulnerability may become clear over time, again enabling the business to tailor their response accordingly. This is particularly helpful in the case of transient or temporary vulnerability, where changes in behaviour are easier to notice if framed against a backdrop of more ‘usual’ behaviours, and especially relevant in the current climate where circumstances can change almost overnight due to events out of the customer’s control.

This is where customer vulnerability detection technology comes in, with automatic analysis of inbound communications used to highlight any vulnerability markers. By logging language signals, be that spoken or written, certain behaviours and other pre-defined factors, it’s possible to signal to the business that it’s dealing with a potentially vulnerable customer and therefore should tailor its interactions accordingly.

What’s crucial is that this information is presented and displayed in a manner that doesn’t impact the case handler’s working practices or user experience, complementing and enhancing rather than replacing existing business processes. The key is to assist users in identifying things they might otherwise miss, putting in place additional checks and balances to minimise the number of vulnerable customers who slip under the radar.

Good additional support isn’t a tick box exercise; the FCA is looking for flexibility in firms. That flexibility requires trust by managers that their teams will do the right thing, which, in turn, requires the right level of training for them to know what the right thing is. Eric Brown, Senior Solutions Consultant at Aptean Respond comments, “Managers also should not discourage staff from taking extra time or flexible steps to respond to vulnerable consumers’ needs, for example, by allowing them to ‘stop the clock’ on their internal service levels, a team or team member’s performance should not be adversely impacted because they are doing the right thing!”

“Managers also should not discourage staff from taking extra time or flexible steps to respond to vulnerable consumers’ needs, for example, by allowing them to ‘stop the clock’ on their internal service levels, a team or team member’s performance should not be adversely impacted because they are doing the right thing!”

Eric Brown, Senior Solutions Consultant, Aptean

5. Communications

“Failure to communicate with vulnerable consumers in ways they can understand may result in an increased risk of harm.”

FG21/1 Guidance for firms on the fair treatment of vulnerable customers

The issue of customer vulnerability also makes it more important than ever for every single customer interaction to be logged accurately and immediately. The FCA’s guidance states that “vulnerable consumers can be exposed to harm if firms have incorrect information or are not aware of information that has already been shared with another part of the organisation.” This is why it’s crucial to ensure proper joined-up working across the enterprise.

Dealing with customer vulnerability should be a continually evolving process, with businesses using the information available to adapt and amend their approach in-line with ever-changing customer needs and market conditions. To ensure the customer remains at the very centre of any efforts to treat all customers fairly, it’s vital that organisations proactively seek out customer feedback and sentiment, using this potentially valuable customer insight to underpin a culture of continuous improvement.

Customer feedback can also be a key indicator of customer vulnerability. It can provide a deeper insight into the customer’s unique set of circumstances, as well as their ability to digest information. In combination with a view of the customer that’s already been gathered by the business, this feedback serves to help the business better understand a customer’s needs, informing the approach to take in all future interactions.

“The ability to proactively address any potential issues with case handlers, exploring reasons for negative feedback without waiting weeks or even months for the data to be linked back to a particular customer or case, is undeniably valuable.” This is crucial for vulnerable customers, helping organisations identify exactly where they can improve to ensure that they’re driving positive change and supporting vulnerability within each and every customer experience.

Alex Lowery, Solutions Consultant at Aptean Respond comments,

“The ability to proactively address any potential issues with case handlers, exploring reasons for negative feedback without waiting weeks or even months for the data to be linked back to a particular customer or case, is undeniably valuable.”

Alex Lowery, Solutions Consultant, Aptean

6. Monitoring and evaluation

“Firms should monitor the actions they are taking to ensure they treat vulnerable customers fairly and the outcomes vulnerable customers experience in comparison to other customers.”

FG21/1 Guidance for firms on the fair treatment of vulnerable customers

Even with the right combination of people, processes and technology, how can businesses be sure they’re treating customers fairly, closely following FCA guidance while continuously improving how they approach the complex issue of customer vulnerability?

It’s vital to closely monitor and evaluate every aspect of a customer vulnerability strategy, putting in place the right checks and balances to ensure vulnerable customers aren’t disadvantaged, thoroughly reviewing the outcomes vulnerable consumers experience in comparison to other consumers.

Jonathan Mantle advocates for the crucial role root cause analysis has to play in this area. He says: “Root cause isn’t just a regulatory requirement, it’s a necessity for any firm that takes continuous improvement and customer feedback seriously. Depending on how it’s done, it can help you uncover widespread, systemic issues that were going under the radar, down to identifying simple tweaks needed in customer communications – or, even internal documentation where it becomes apparent frontline agents are misinterpreting process instructions.”

“The first trick is understanding how to get it right. Too often, firms end up with long category lists covering every eventuality they can think of. But this just saturates your data and may lead to you missing wider patterns. Your categories need to be concise, giving you a better pool of information that you can then dig into deeper as needed.”

“The second is the language you use in your categories. You may have ‘poor conduct’ or ‘incorrect advice’. But, by attaching adjectives, you move away from capturing causes to justifying allegations –which isn’t what root cause is for. Think how a complaint handler may struggle to use those if the customer felt the conduct was poor or they were misadvised, but they didn’t. This leads to the infamous ‘customer perception’ option which is not and never will be a root cause – it’s a symptom. So, remove the adjectives and simply use ‘conduct’ or ‘advice’ – leaving the overall outcome to determine its justification.”

“The final trick is to be more flexible or inquisitive with your ‘origin point’ when running your reports. Choosing causes and allegations will show the most recurring trends. But they may not indicate issues of the greatest impact to people. So, try using customer-related information, for example, age or where an issue was raised by those with a particular (or any) vulnerability. This will show all the issues affecting those groups of people. And you may find that something that was previously low on the priority list as it was remote in occurrence, may disproportionately affect a certain demographic.”

“Root cause isn’t just a regulatory requirement, it’s a necessity for any firm that takes continuous improvement and customer feedback seriously.”

Jonathan Mantle, Consultant and Founder, Complaints EQ

7. Conclusion

The FCA’s guidance may have put customer vulnerability firmly at the top of the agenda for the financial services sector, but it’s down to businesses themselves to deliver the goods, supporting vulnerable customers at every stage of the customer journey.

Leaders should own everything in their domain, they are in a position of power and should exercise it with due care to encourage their teams to achieve great things; they should never be satisfied and strive for better. It’s incumbent on them to understand the firm’s social purpose and embed it within their teams.

Now is the time, if you haven’t already, to embrace and embed the concept of customer vulnerability into the culture of your firm. The fair treatment of vulnerable customers is not just another tick in the compliance box, it’s a business-wide commitment. It must play a fundamental role in the overarching ethos of every organisation, embedded at the heart of all businesses, with every person aware of the key role they have to play in upholding this commitment.

“Senior leaders should create and champion a culture that prioritises the fair treatment of vulnerable consumers.”

FG21/1 Guidance for firms on the fair treatment of vulnerable customers

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About Aptean

Aptean is one of the world’s leading providers of purpose-built, industry-specific software that helps manufacturers and distributors effectively run and grow their businesses. With both cloud and on-premise deployment options, Aptean’s products, services and unmatched expertise help businesses of all sizes to be Ready for What’s Next, Now®. Aptean is headquartered in Alpharetta, Georgia and has offices in North America, Europe and Asia-Pacific.

To learn more about Aptean and the markets we serve, visit www.aptean.com.