While the FCA is not proposing changes to rules or guidance at this stage, it warned that it may return to the subject and consult on changes if this was needed.
The three areas noted are: product and service design, customer support, and continuously review and adapt strategies.
Some of the FCA’s views were notably critical of the industry, in particular it noted: “All too often, products and services appear designed for an average consumer who may not exist. Alternatively, processes and policies are not designed around customer, but corporate need.”
Here, Mortgage Solutions analyses the key elements highlighted by the FCA:
Product and service design
The FCA noted that older customers were rarely considered when products and services were being designed.
It said that too few products anticipated the needs of an ageing population.
With this in mind, firms could:
understand and anticipate the current (and future) needs and circumstances of older customers in their target markets;
take older customers’ needs into account when developing distribution channels, and customer support for older consumers, or other vulnerable groups;
involve older and vulnerable consumers in testing and product design at proof of concept stages.
The FCA agreed that not all processes can or should be built around the needs of an ageing population, but remarked that where other considerations were weighed more highly, firms could consider how they supported older consumers, especially as their needs changed over time.
understand how to help older customers find the most appropriate products and services for their needs. This includes developing new specific products to fill product gaps in the market;
help customers to recognise when they are having difficulties – and encourage them to ask for more help;
take steps to mitigate risks and provide appropriate support as consumer needs and circumstances change.
Continuously review and adapt strategies
Importantly, the regulator highlighted that addressing a continuously ageing population required continual strategic evolution, not one-off, short-term solutions, or ‘box-ticking’ approaches.
It added that “firms and regulators need to be vigilant to this” and suggested firms could:
consider if they need to adapt or retain access channels for groups who depend on them;
continuously review strategies, business models, supporting policies, controls and management information to ensure they remained appropriate in light of demographic change or changing consumer behaviours and needs.
The FCA emphasised that firms needed to be mindful of the risk that business changes could lead to unintended exclusion, or poor customer outcomes.
At present, the regulator appears happy to take a supportive, proactive stance, rather than a prescriptive, enforcement approach, adding: “The key to developing effective mitigation strategies and delivering better outcomes is to work with the market and other stakeholders such as consumer groups, trade bodies and government.”