A few days later, the Department for Business and Trade issued a consultation paper calling for greater sharing of consumer vulnerability information.
Simplistically, the two papers are asking for greater sharing of vulnerability data, because consumers can find the process of disclosing their issues to multiple providers both time-consuming and stressful. Additionally, companies are investing both time and money to create and maintain their own data systems – which is inherently inefficient.
The above papers are focused on the utility sectors, where vulnerability data have been collected for many years.
Utilities sector firms have ‘Priority Service Registers’ – essentially lists of vulnerable consumers, which they act upon. Consumers volunteer their data to be on these registers, so they can be treated appropriately for their needs. These registers were all built separately – and then, later, firms started to share data – since it isn’t in the interest of the consumer to keep repeating themselves, plus maintaining multiple sets of data is costly.
These sharing initiatives have been slow to gain ground, so the regulators are now pushing to accelerate this.
How this relates to Consumer Duty
Should the finance sector learn from the utilities sector? In the utilities sector, consumers typically have to liaise with multiple utility companies – gas, electric and water.
In the finance sector, due to the distribution chain, there are even more firms to deal with and there is the potential for even more frustratingly repetitive work for consumers. Many firms are considering amending their own internal systems in order to meet the Consumer Duty regulations.
But is this an expensive, short-term solution?
At present, the Financial Conduct Authority (FCA) does not specifically require firms to share vulnerability data. The FCA does require that firms monitor consumers through the lifetime of products – and, to accomplish this, advisers and manufacturers will either have to repeat vulnerability assessments or share their data.
There isn’t another option. It is, therefore, going to be far more cost effective to share data, using external systems that are capable of this.
Managing client vulnerability
The finance industry’s Building Resilient Households Group in its report to the Insurance and Financial Services All Party Parliamentary Group has called for “smart, safe and secure data-sharing to speed and improve support for vulnerable customers”.
Will these customer vulnerability data be available for the finance sector to use? This depends on the consumer, as they will have the ability to select with which organisations they share their data.
MorganAsh is working with one utility company that already has 1.9 million customers on its vulnerability list, covering four million households. While these data cannot be shared today, the aim is to empower the consumer to be able to share it with whichever organisation they wish – saving them considerable hassle.
Consumer Duty’s rules state that firms must accept data on vulnerability when consumers provide it to them, so firms may well be forced into accepting these data by their vulnerable customers.
It is clearly in the customers’ interest to not have to repeat going through their issues to multiple organisations – and there is both research and evidence to support this.
Part of improving our interaction with vulnerable consumers is how we can make interacting with them easier and frictionless – rather than forcing them to repeatedly disclose their issues, which can be massively stressful.
Too many organisations see consumer vulnerability as an issue from which they need to protect themselves – whereas we should be looking at how we protect the consumer from multiple, identical processes – making it easier for them.
