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At the TISA Vulnerability Conference in London, the FCA has delivered a speech on its approach to ensuring firms treat vulnerable customers fairly.
Nish Arora, Director, Consumer and Retail Policy at the FCA, outlines the FCA’s forthcoming guidance on vulnerable customers which will provide firms with greater clarity around vulnerability and explain what firms need to do to ensure the fair and consistent treatment of vulnerable customers in financial services.
The fair treatment of vulnerable customers has been a focus of the regulator for a number of years and it continues to be so. Revised guidance is expected to be finalised later this year, following a consultation in the spring.
In this speech, the FCA outlines its aim to take dealing with vulnerability from a ‘box-ticking’ exercise to something more bespoke, with the expectation that firms investigate what a vulnerable customer’s needs are and respond effectively to deliver good outcomes. It wants to see firms truly embed this in their “culture, practices and processes throughout the whole consumer journey, from product design to customer service”.
The treatment of vulnerable customers is an important issue within the industry. In 2017, the FCA’s ‘Financial Lives’ survey showed that 50% of UK adults display one or more indicators of being vulnerable. Factors that impact on vulnerability might include, physical and mental health, life events, such as divorce or bereavement, and financial capability.
In its proposed new guidance, which was consulted on in July last year, the FCA focuses on four main areas that firms should consider when approaching vulnerability. These are:
The FCA has stated that it hopes its forthcoming guidance will provide further clarity for firms regarding vulnerability and give them ideas about how they can provide better support for their vulnerable customers.
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