It’s great to see the FCA sharing good practice, and areas for improvement, to help firms meet their Consumer Duty requirements. We know that firms are moving at different paces, with different focus areas.
In this thematic review, the FCA focuses on annual Consumer Duty Board Reporting. I’ve looked at the information that the FCA have shared, and pulled out some considerations for vulnerability leads.
I have included some areas as direct quotes from the FCA as they provide tangible examples of good practice on the treatment of vulnerable customers. Others are questions we might want to ask ourselves to take reporting, and the focus on vulnerable customers, to the next level within our organisations. You can read the FCA report in full here.

At Inclusive Outcomes, we can help with many of these areas, and would be happy to speak more.

Challenge from the Board

Board reports are to prompt discussion, understanding and challenge. One area of good practice was where a Board had an active Consumer Duty champion. A similar vulnerable customer champion at Board level could be something to consider.

Another area for some firms to improve was where reports didn’t have input from relevant business areas.

Vulnerable customer teams may want to input into Consumer Duty reporting to ensure the work they have done, and the impact on consumer outcomes, is captured appropriately.

Good quality data

For good practice, firms used a range of both quantitative and qualitative data from internal and external sources, including comparator and benchmarking data. Good reports also had clear commentary, and conclusions, from this data.

Those with areas for improvement failed to give clear definitions of good outcomes across different products and services that could be tested against available MI.

Taken verbatim from the FCA report:
Some reports showed how their monitoring approach allowed them to track whether different groups of customers, including those with characteristics of vulnerability, were receiving different outcomes.

For example:

Some firms illustrated how they were identifying customers in vulnerable circumstances, including employing specialist teams who used the TEXAS (Think, Explain, eXplicit consent, Ask, Signpost) model to identify potential vulnerability and offering multiple ways for customers to self-disclose their vulnerabilities.

One firm demonstrated its use of data to proactively detect if customers may be at risk of developing vulnerabilities, such as detecting income shocks.

Some reports had a clear overview of a firm’s third party relationships, and the processes in place. Customer vulnerability teams could be thinking about:

Good practice included providing examples of actions taken on training for front line staff and system functionality for contact preferences. Many vulnerability teams have already made good progress in these areas, particularly for accessibility, and should include this in their Consumer Duty Board reporting.

Teams may also want to consider how support and communications change for specific characteristics. For example, how does the communications strategy change for someone who is experiencing, or has experienced, domestic and/or economic abuse? And how does the support strategy change for people who are overcoming problem debt?

Good practice includes examples where firms have shown what evidence of how they have assessed, and then responded to, consumer understanding of communications, literature, websites and other materials. There is specific reference to firms getting seals of excellence for accessibility.

Some reports included people initiatives to demonstrate how Consumer Duty was embedded in the culture of the firm. Customer vulnerability teams may want to think about:

Good practice includes clear actions, action owners and timelines. Like any good action, there is evidence of how risks have been identified, responded to and then measured.

The FCA report had specific examples of actions taken to improve outcomes for customers experiencing vulnerability:

It was positive to see firms provide specific examples in their reports of actions they had taken to address risks of delivering poor outcomes to customers with characteristics of vulnerability, with an evaluation of the effectiveness of those actions.

For example:

One firm provided details of the increase in vulnerability disclosures customers had made following changes to make this process easier. This included an increased proportion of customers making such disclosures through the firm’s mobile app.

Several firms described how they had introduced British Sign Language communications, with one including an assessment of early results that suggested it was a success and was experiencing increased demand.

Some firms gave examples of how they had provided flexible solutions to help customers with particular needs. One firm described how it was able to use existing data to bypass a usual requirement for a written submission from a customer who had lost the use of their hands. Additionally, a note was made on file so they could access this solution in future.

This blog is to provoke thinking for people who work in customer vulnerability teams on how to apply the findings to their strategies and plans.
Get in touch if you’d like to discuss any of the above areas in more detail, and how it applies to your organsiation.