Home » How fintech can reach out to the financially vulnerable.
By Jerry Young, CEO, ieDigital 1
The Financial Conduct Authority’s (FCA’s) Guidance for Firms on the Fair Treatment of Vulnerable Customers makes it very clear that financial services providers should be doing all they can to provide access to products and services to all.
The guidance is clear in expecting firms to provide customers with a level of care that is appropriate given the specific characteristics of the customers themselves. It states that the level of care that is appropriate for vulnerable consumers may be different from that required for others, and firms should take particular care to ensure everyone is treated fairly.
At a first glance, it may seem that this box is well on the way to being ticked, with banks and building societies now offering a myriad of options for people to interact with them. Telephone call centres are being bolstered by increasingly sophisticated technology, such as banking apps and interactive websites, and a face-to-face branch network is still maintained by many firms – although the continued closure of branches across the country, by many of the major providers, is still arguably a topic that concerns many, particularly the elderly.
Investment in fintech – is it enough?
Technology is arguably the method which has witnessed the most significant advances in recent years, a pattern that has been dramatically increased further because of the Covid pandemic, making services accessible to a much wider cross-section of society. There is a freedom for customers to engage with their bank or building society whenever they want, 24 hours a day; security and financial control has been improved and there is access to new products and services either instantly, or with a much-reduced lead time.
However, although these developments are useful, are they good enough to reach out to the financially vulnerable? Indeed, do we even understand – or recognise – all the forms of vulnerability that are out there? Are we confident that financial services firms are currently equipped with the tools to deliver exactly what the FCA demands, that is, literally providing access to products and services to ALL people? A startling piece of research from the FCA reveals that the coronavirus pandemic has propelled the number of vulnerable adults in the UK to almost 28m – that is almost half of the population. And when you consider the multitude of issues that are classed as vulnerabilities, ranging from dyslexia to cognitive limitations, and stress to the effects of medical treatment, it becomes clear that providers have a lot to do to become accessible to everyone.
Vulnerable consumers are more likely to be unbanked and less likely than average to hold any form of savings, insurance or protection, pension, or investments. Indeed, research from Citizen’s Advice has found that only one in three people with severe mental health problems have home insurance or even a savings account. (Citizens Advice 2019, the Mental Health Premium).
So, are all customers, including these vulnerable members of society, really being treated fairly? With technology increasingly being the de-rigour way that financial services businesses are interacting with their customers, how do we use the latest technology to transform the customer experience without leaving vulnerable parts of society behind?
Blending technology with the human touch
The digital experience must evolve to become more interactive, more personal and make more of connection with members and their individual needs. The correct solution for one person looking to open a savings account will not be the appropriate method for everyone – we need to start delivering more engaging services.
The hardware is already in existence. Interactive smartphone apps are now the norm, as is interactive, live chat features hosted on websites, and even 24/7 video support. However, providers need to ensure they are not overlooking the human, interactive approach, essential tools to understand the very specific needs of some financially vulnerable people.
Financial services providers must also be far more proactive with communications to customers to make them feel valued. They need to be more inquisitive and learn more about customers goals and support the life events that happen along the way – again, what is an important milestone for one person will not be as important for someone else.
For Digital Transformation to be successful and for financial services providers to thrive, they need to make it a priority to deliver more human and more interactive experiences. This will help to develop a long-term relationship and a more engaging future journey for many more people, including those who might have felt alienated in the past because of their so-called vulnerabilities.
The financial services sector might have its work cut out to provide products and services to literally everyone. However, by investing in interactive, immersive technology that makes the customer feel valued, important and – above all – an individual and not a number, many people who might be classed as vulnerable will find it much easier to obtain the product or the service they are looking for. If we can achieve this, it will be a job well done.
1 – Jerry Young is the CEO of ieDigital with more than 25 years’ experience in Financial Services and Software. During his time as CEO, ieDigital has been named by Ovum as a ‘Market Challenger for a Digital Banking Platform’ and was recognised as one of the world’s ‘Most Significant Providers’ in the Forrester Wave for Digital Banking Engagement Platforms. Jerry has led ieDigital in being shortlisted for multiple awards including ‘Best Digital Transformation Technology’ at the Credit and Collections Technology Awards and ‘Best Technology Partner’ at the Car Finance Awards. Clients include Lloyds Bank, Santander, Toyota, Dudley Building Society and Cambridge and Counties Bank. Prior to joining ieDigital, Jerry worked for Fiserv leading their EMEA banking operations, Oracle Corporation responsible for Banking and Insurance and he was Managing Director of FICO (Adeptra).