Closing the loop on customer vulnerability with support tracking

One of the first hurdles to overcome for any firm on its customer vulnerability journey is the actual identification of vulnerable customers. This is by no means a small feat, as many firms have found out when trying to meet the requirements of the FCA’s Consumer Duty. 

It’s important to also note that, while significant, it is just one responsibility that makes up a firm’s wider customer vulnerability management strategy. Once we have identified our vulnerable customers, it is followed by the challenge of what do we do next – and the support we recommend. We know that we need to provide support – to enable clients to achieve a good outcome – but to really understand the outcomes clients receive, we need to look beyond purely ‘signposting’ or making an initial recommendation. We need to look at the complete picture.
 
Alongside recording the recommendations made, and how these were made, we also need to note whether it was suitable, and also whether it was taken up and implemented by the client. Without understanding and tracking this critical stage, we risk undoing all the important work done earlier in the process – identifying, classifying and monitoring potential vulnerabilities – and risk delivering a poor outcome by not knowing where the failure point is.

For example, many firms will recommend that consumers set up a will and a lasting power of attorney – but the take-up rate for these can be low, resulting in poor outcomes. In this instance, the identification of the vulnerability is very high – not having a will in place – but the implementation of getting the will is the thing to break the chain. 

Just recently, a probe by the FCA revealed that some banks and building societies needed to provide greater support to those dealing with a bereavement or setting up a power of attorney. The regulator found examples where individuals were unable to access funds because staff were unsure of which action to take, or how quickly. 

It quickly becomes clear that tracking suggested support is just as important as making the recommendation in the first place. After all, it is this which allows firms to keep track of what happens with the individual and ensures that interactions with clients are appropriate. Furthermore, the record of suggested support becomes hugely valuable for audit purposes, allowing firms to report on the support actions consumers take up and implement. It goes without saying how important this is in demonstrating compliance with Consumer Duty. 

In truth, we need to understand and track all stages of customer vulnerability management, as any one of these can fail. This starts with identification and classification – understanding who has what –and to what severity – before we even move onto monitoring. Then we can recommend and track support pathways. Following this, we can monitor outcomes far more closely to determine whether a poor outcome was mitigated. 

Without robust data at every stage, it becomes much harder for firms to really know what is going on with clients and to accurately pinpoint where any failure point is. The FCA has consistently reminded firms just how important good data is in managing customer vulnerability and for meeting the requirements of Consumer Duty. The latest example was in its multi-firm vulnerability review which identified that many firms are still unable to monitor or take action on outcomes for vulnerable customers.

There’s no question that this is an onerous task. The FCA is fully aware of this and has long advocated for the use of technology to help firms meet the requirements. Digital platforms – such as the MorganAsh Resilience System (MARS) – are now available to not just help with the assessment, but also to make recording and tracking information at every stage much easier. 
MARS, for example, offers a catalogue of standard pathways – the ‘next steps’ presented to users when a characteristic of vulnerability is detected. In our latest software update, we’ve added the ability to record how and when suggested support is recommended to clients, along with their reactions – and whether they take-up the recommendations. There is also the ability to record if support is pending, partially completed or not implemented, as well as if it’s incorrect, not required or declined by the consumer, with notes available to add for all progress.

We know that most proactive advisers will want to go the extra mile and support clients at the time of need with relevant recommendations. Given the scope of the potential next steps available – including mitigating strategies, support organisations and charities – covering a spectrum of potential vulnerabilities of varying severities, this can be easier said than done. Add in the need to record, track and report on all this information and there’s no question that a digital-led approach enables firms to actually achieve this – moving from simple signposting to a recommendation strategy that is targeted, can be monitored, is data-rich and always audit-ready.