Age-Related Impairment

Age-Related Impairment

The 2017 Royal Commission into Banking, Superannuation and Financial Services Industry found that, among other issues, vulnerable customers were not being treated fairly by financial services providers. Thus, it is important that firms prioritize the early identification of signs of vulnerability in their customers and provide tailored customer service with appropriate levels of care, effectively preventing their mistreatment.

The Financial Conduct Authority (FCA) defines a vulnerable person as someone who “due to their personal circumstances, are especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.” (FCA, 2015). Customers may be vulnerable due to their personal conditions or wider circumstances falling under the following seven categories:

  • age-related impairment
  • Inexperience
  • cognitive impairment
  • mental health issues
  • chronic illness
  • traumatic life events and big changes to personal circumstances
  • domestic violence and financial abuse
  • financial hardship

Vulnerability remains high on the agenda of regulators and firms. However, ensuring all customers get the right outcome and experience according to their individual circumstances continues to prove a challenge. A ‘one-size-fits-all’ approach to complaints doesn’t take into account the unique circumstances
customers may find themselves in. As such, staff need to be both flexible and sensitive in their approach.

Some firms only train frontline staff to identify vulnerability in order to triage these cases into specialist teams who then manage the customer from that point. Others may have the understanding and training needed, but lack the tools to offer differentiated solutions for vulnerable customers.

In general, firms tended to adopt two different approaches to customer vulnerability:

  1. Categorizing customers according to specific areas of vulnerability, often having decision trees that grow out of these categories for escalation within the firm
  2. Treating each and every customer according to their individual circumstances

Thus, it is important that firms prioritize the early identification of signs of vulnerability in their customers and provide tailored customer service with appropriate levels of care, effectively preventing their mistreatment. An ‘individual circumstances’ based approach provides is more strategic over broader ‘categorization’.

Many firms still use manual processes to select and identify cases for review, as well as during the review itself. If there are mistakes in the process and it goes through an inefficient loop several times over, there is a combined negative effect on staff morale and consumer outcomes – potentially harming any unrecognized vulnerabilities. Stopping manual work is a massive efficiency saver as well as going some way to maintaining good customer relationships.

Voice Analytics and AI play an important role in early identification from customer interactions across various channels and journeys and automation of the quality assurance processes.