Digital Exclusion and Vulnerable Customers

It is hard to dispute that the Covid-19 pandemic has not only highlighted but increased our reliance on technology. In fact, over the last eighteen months, whilst in and out of lockdowns, any semblance of our normal daily lives has probably only been thanks to our modern world. Furthermore, with many expressing a preference for the adjustments made of necessity, it looks unlikely things will ever truly return to exactly how they were before.

Whilst digital solutions may help in certain situations, they can also create difficulties for some in society. The pandemic has thrown into view the clear divide between those who can and those who cannot when it comes to technology.

Many believe that digital exclusion is a problem faced exclusively by the older generation, as they were born in an age without the technological advancements so prevalent in today’s society. Therefore, with younger generations growing up in a digital world, it is often assumed that this problem will eventually fade out.

However, whilst there is, as you might expect, some evidence that a higher proportion of the elderly have a distrust of the internet and limited access to technology, there are also many other factors that can contribute to digital exclusion. Such factors can include disability or ill health, low financial or emotional resilience, or low or no access to help and support.

If you have been keeping up-to-date with FCA releases in the last year, you may recognise these as key components of the drivers of vulnerability under the regulator’s guidance on vulnerable customers. In fact, research published by the government from the CMA suggests that many of those with characteristics of vulnerability are less likely to be confident with technology, use the internet, or even own a computer or smart device.

Digital exclusion is indeed more widespread than most realise with a study from the University of Cambridge showing that, even before the pandemic, it was estimated to affect around 22% of the UK’s population in some way.

Poverty plays a huge part in this statistic. Research conducted by Ofcom found that the proportion of adults in semi or unskilled jobs or those who are unemployed, who do not go online, is almost double the UK average at 22% vs 12%. Moreover, the University of Cambridge study found that compared with 99% of those with an income of over £40,001, only 51% of those with earnings between £6000-£10,000, had internet access.

Sadly, for some families, Wi-Fi or the devices necessary to access it, are simply a luxury they cannot afford. During lockdown many faced the impossible decision of having to choose between having the internet and the key services it provides e.g., online schooling, working from home; and being able to feed their family or heat their home.

Disability, whilst often also resulting in low income, comes with additional difficulties in accessing online resources. Many face physical and/or mental limitations, such as difficulties using a mouse or keyboard or concentrating for long periods of time. Significantly, disability is a key driver of digital exclusion in younger generations. One statistic shows that, of those between the ages of 16 and 24, affected by digital exclusion, 60% class themselves as disabled.

The impact of digital exclusion on already vulnerable customers cannot be understated. Digital services can be extremely useful to track outgoings, pay bills, or compare providers.

Unfortunately, those who are already facing difficulties and most need to be able to access these services, are often those with little or no access to the internet. Therefore, they may find it extremely challenging to effectively manage their finances. With the treatment of vulnerable customers heavily in the forefront of the FCA’s focus, firms need to be mindful of how new tools or services can be tailored for those facing digital exclusion, or what further action they can take to support these individuals.

About the author

Chloe joined us in 2020, having graduated with a 2:1 in Graphic Communication at the University of South Wales. Chloe assists in the design and content creation of new e-learning modules as well as the re-branding of existing courses.

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