Empowering financial service providers: Vulnerability toolkits to support those in need

Craig Wilson, Head of Private Sector at Sopra Steria UK

Amidst the current climate, marked by financial challenge and uncertainty, the definition of vulnerability has evolved. Recent global events and shifts in the socio-economic dynamics mean high inflation and more people feeling concerned about their financial wellbeing.

56% of UK adults could now be identified as vulnerable under new Consumer Duty regulations, which came into force in 12 months ago. The role of financial services (FS) providers in supporting vulnerable individuals is therefore critical, with their new-found responsibility to better understand individuals’ needs and extend services to offer tailored assistance and guidance.

Vulnerability toolkits

Vulnerability toolkits are a set of guidelines that help to accurately define and understand the nuances of different types of vulnerability and identify the common harms customers might be exposed to. They are specifically designed to help FS organisations determine which customers may be experiencing a range of difficulties and need additional, targeted support. This way, organisations can adapt services accordingly to better assist vulnerable customers.

Responsibility of financial service organisations

To be able to serve customers with the right support, FS organisations must ensure those working in frontline roles are equipped with the skills needed to effectively refer customers to vulnerability toolkits. They must be able to identify, support and record customer vulnerabilities. As such, this commitment needs to be embedded into corporate culture. This means that introducing regular training for employees in using available tools to identify and assist vulnerable customers is essential.

Fostering a better understanding of the vulnerabilities faced by customers should also be a key part of educating employees. An example of this is our development of Support Point in partnership with the University of Edinburgh. Piloted at Capital Credit Union, the tool enables people to self-disclose if they are in a vulnerable situation and the insights it provides allow service provides to better understand and report on the nature, scale and impact of vulnerabilities across their customer base.

What does this mean in practice?

The biggest challenge for FS providers is being able to quickly and accurately identify those in need of support. Vulnerable customers often don’t come forward for help, this could be down to embarrassment or a lack of understanding about the support available.

To determine customers as vulnerable, organisations must leverage data on indicating factors, such as missed payments or loan applications. And now, with generative AI in the equation, analysing these data sets is becoming increasingly more efficient and reliable. After analysing and gaining insights from their customers, organisations can generate personalised recommendations that are aligned to an individual’s financial behaviours and capabilities.

The failure to fully leverage customer data represents a missed opportunity for FS organisations to enhance their ability to provide tailored support to those who need it. As such, investing in technology, like AI and data analytics, can help to scale support for vulnerable customers. By harnessing advanced analytics, banks and other FS providers can gain deeper insights into the unique challenges faced by vulnerable customers, enabling providers to tailor solutions that address their specific needs.

The path forward

Vulnerability toolkits should be a standard part of FS providers’ offer to customers, particularly with AI and data analytics offering a new era of better understanding and identifying the different types of customers they are serving.

The responsibility of FS organisations transcends conventional practices; it necessitates a holistic approach that includes social responsibility, inclusivity, and the ethical use of data. People interact with banks, building societies and credit unions throughout their lives, they are a central pillar of society. As such, vulnerability toolkits become instruments for fostering financial resilience and empowerment across society.