It is fair to say that the industry has come a long way in the past 10 years in assisting vulnerable customers, however now is not the time to be complacent – there is still much more to do.
The economic outlook is rife with inconsistency, and with an interest rate rise likely in the next 18 months and further cutbacks in welfare spending, the pressure on consumers exacerbated by a growing ageing population will grow, turning the latent pool of vulnerable customers into reality that will stretch resources and process.
The FCA has quite rightly placed a considerable focus on how firms treat vulnerable customers and their definition is as good as any;
“A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.
The problem with the definition is that it is open to interpretation in key areas, around “what are the circumstances that elicit detriment” and “what is an appropriate level of care” and that leads to inconsistency of approach and application across the Industry.
So what are the other challenges?
Vulnerability is not just for collection operations, it is a whole life cycle issue and by that I mean it starts with product design (e.g. product rules).
It is critically about understanding and culture, understanding that it can occur at any time both mentally and physically; understanding that financial hardship is vulnerability. The culture of the organisation, top down, will dictate how vulnerability is managed, engaged and dealt with. If the culture is negative it will be dealt with badly.
Identification is also a key issue which is complicated by the movement to digital channels and the segmentation of work; it is easier to identify vulnerable customers “via a verbal channel” rather than non-verbal, however it has to be recognised that the customer has a greater choice of “entry” into an organisation. It is therefore vital that business rules that support vulnerability and associated treatments are built into every touch point.
Ensuring the right agent is dealing with the customer then becomes imperative. I am very much in favour of all customer facing staff having the mind-set, skill set and accountability to engage with vulnerable customers. Specialist areas create hand offs, queuing and call backs at a time when the need is to decrease not increase anxiety, although I accept that specialists are required in certain situations.
This is a challenge to organisations however. Being able to deal with vulnerable customers in a “one and done” process at the point of entry will vastly improve the customer experience and avoid re-work which can potentially drive up complaints and costs. I would also like to see greater empowerment of staff to deliver outcomes outside of policy and process when required. Organisations fall into the trap of adhering to policy/process when a little bit of common sense is what is required.
I am not advocating a free for all, however well trained empathetic staff who understands the needs of vulnerable customers will more often deliver the right outcome for both the organisation and the customer even if not strictly within policy, and that must be right!
The industry must move this forward in a collaborative way – it is not a competitive issue. I would like to see a Summit Meeting of all interested parties, including customers – under the auspices of the FCA – setting out the “way forward”.
The already tarnished reputation of our industry will not be enhanced if there is unequal treatment of vulnerable customers, and the quality of any given outcome is predicated by which organisation you have a relationship with.
I strongly believe that customers need and want ease of access, consistent treatment and outcomes across the Industry – underpinned by fairness and understanding – at a time when they are experiencing vulnerability on either a short or long term basis.
Now is the time to act before conditions deteriorate, and the industry is on the back foot under pressure from a rapid acceleration in the flow of vulnerable customers. To not do so would be at best a significant missed opportunity or at worse negligent.
Clive Pickett, Collections Transformation Specialist