Context
The FCA has published examples of good practice and areas of improvement for firms, alongside research (commissioned in 2024), which was aimed at finding out more about the experiences of vulnerable customers.
Key points to note and next actions
The FCA’s research has found that vulnerable customers are more likely to report a negative experience with financial services firms, such as their bank or insurer, when compared to non-vulnerable customers, with only 40% of vulnerable customers disclosing their needs to their financial services provider.
However, those that do open up tend to have better experiences, with three quarters of vulnerable customers who told their firm about their circumstances (74%) said that staff asked the right questions to understand their situation, 6 in 10 (57%) said their firm ‘cared’, and 58% said their firm took action to provide support they needed.
Anyone can become vulnerable due to health, life events, ability to withstand financial or emotional shocks, or because of poor financial or digital literacy.
The FCA issued guidance to help financial services firms support consumers in vulnerable circumstances in 2021 and introduced the Consumer Duty in 2023, which requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances.
The FCA has published a review and good and poor practice examples to further help firms provide the right care, consistent with the Consumer Duty. This review provides an overview of the regulator’s expectations, examples of good practice and areas for improvement in relation to:
- Governance and outcomes monitoring (also includes considerations for monitoring outcomes)
- Consumer support
- Consumer understanding
- Products and services
Firms should review their existing vulnerable customer processes against the information in the FCA’s review to identify any areas for improvement and implement appropriate changes where necessary.
Sarah Pritchard, executive director, competition, markets and international, said: ‘It can be hard to tell your bank or insurer about your specific needs, but those who ask for help tend to feel more supported. We’ve seen good examples where financial firms are making a difference for vulnerable customers, but we know that vulnerable people report more negative experiences than others.
’We want firms to build on the good work identified, to help people open up and make sure they get the support they may need.’