What happened?
In the second part of TCC’s vulnerability webinar series, Gary Maude and Garry Evans focus on how firms can align strategy, culture, and operational controls to deliver positive outcomes.
A successful approach requires senior management to actively drive a clear risk appetite down through the business, rather than allowing individual business areas to create their own siloed cultures.
Why does it matter?
Firms often struggle with the ’empowerment conundrum’—allowing frontline staff flexibility to help vulnerable clients while maintaining regulatory consistency.
Without structured parameters and detailed process granularity, decisions become highly subjective, leading to inconsistent treatment and the dilution of strategic controls.
Who is affected?
Operational leaders and compliance teams across banking, consumer credit, wealth management, insurance, and motor finance.
Key risks
- Allowing business areas to drive up operational culture, causing fragmented compliance standards.
- Frontline processes that are too open to subjective interpretation, leading to inconsistent outcomes.
- Confusing ‘nice’ treatment with ‘fair’ treatment, which can inadvertently harm clients’ long-term credit or financial interests.
Actions to take
- Establish a clear, firm-wide vulnerability risk appetite statement owned by senior management.
- Incorporate vulnerability considerations directly into your product governance cycle from design to launch.
- Define structured parameters for frontline staff to balance flexibility with process consistency.
- Ensure staff competency training is highly challenging and goes beyond a simple annual checklist.
Wider implications
Service designs must be reviewed to eliminate counterintuitive targets, such as pressuring call center staff to resolve calls quickly regardless of the client’s vulnerability. Robust controls must monitor the end-to-end customer journey.
Recommendations
Firms should review their operational processes to ensure they provide sufficient granularity for staff to handle multiple and transient vulnerabilities consistently.
Supporting sources
Frequently asked questions
How does culture impact a vulnerability strategy?
Culture must be driven down from senior management to ensure all business units adhere to a unified risk appetite and compliance standard.
What is the empowerment conundrum?
It is the challenge of giving staff flexibility to support vulnerable clients while maintaining consistency to avoid subjective decision-making.
What is the difference between 'fair' and 'nice'?
For example, allowing a client to make minimum payments to be ‘nice’ might keep them in debt longer and harm their credit rating, which is not ‘fair’.
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