What happened?
In part three of TCC’s vulnerability webinar series, Garry Evans is joined by Juana Diaz-Landinez and Gary Maude to explore how firms can build ‘safe environments’ to support vulnerable customers.
Many customers hesitate to disclose their vulnerability due to fear, embarrassment, or concern about how their data might be used. Firms must move away from expecting customers to self-identify and instead reduce barriers to trust.
Why does it matter?
Supervisors complain that firms are unable to identify or monitor outcomes for vulnerable customers due to poor data and unengaged senior leadership. Evidencing is the key benchmark for compliance.
Furthermore, internal conflict can arise where advisors face sales pressures to fast-track transactions, making it vital to establish friction and robust controls in the customer journey.
Who is affected?
Quality assurance and frontline advisory teams across banking, insurance, lending, wealth management, and consumer credit.
Key risks
- Relying on client self-identification as the sole method of screening for vulnerability.
- Subjecting vulnerable customers to burdensome processes to prove their circumstances, causing distress.
- Failing to identify transient or multiple vulnerabilities during ongoing customer touchpoints.
Actions to take
- Build a positive disclosure environment that actively promotes the benefits of sharing information.
- Train staff to treat every client touchpoint as an opportunity to detect changes in circumstances.
- Review quality assurance frameworks to ensure they capture both static and thematic monitoring.
- Incorporate contraindicators like arrears, litigation, and declined claims into your MI.
Wider implications
Meaningful monitoring requires a holistic view of vulnerability across all three lines of defense. Senior leadership must be actively engaged, ensuring committees review relevant MI and agree on clear remediation actions.
Recommendations
TCC recommends firms evaluate their QA metrics, remove non-material weighting, and design disclosure environments that protect and empower vulnerable customers.
Supporting sources
Frequently asked questions
Why do customers hesitate to disclose vulnerability?
They often feel embarrassed or fear that disclosing their circumstances might lead to a poorer service or denial of products.
Why is self-identification unreliable?
Only about 40% of vulnerable customers self-identify, meaning firms that rely on this miss the majority of clients needing support.
What are compliance contraindicators?
Metrics like arrears, litigation, and declined claims that can signal where vulnerable clients might be receiving poor outcomes.
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