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Digital innovations may help vulnerable consumers – CMA

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  • 14/11/2018
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Digital developments have potential to help the financial services industry support vulnerable consumers, the latest discussion published by the Competition and Markets Authority (CMA) revealed.

 

Vulnerable consumers include people affected by mental health issues, those on low incomes and in later life and these populations have been an increasing focus of work by regulators.

The CMA’s panel sessions found that technology may facilitate third party support, such as apps that grant permission to allow a family member or carer to act on someone’s behalf.

Regulators and businesses are increasingly using technology to improve services, drawing on customer data to link up priority services schemes for vulnerable consumers.

In the retail banking sector the CMA has forced big banks to embrace Open Banking, enabling consumers to share financial transaction data with third parties to help them find better deals.

Open Banking also has the potential to help vulnerable consumers, including offering opportunities for users to grant permission to family members for support in managing their finances, the report said.

 

Offline difficulties

Those who are offline without access to the internet are more likely to have difficulty engaging in markets and more likely to be in vulnerable circumstances. Such consumers can still be helped through the use of digital tools.

However, the role of technology in helping identify vulnerability is still a work in progress and limits remain.

The panel revealed that attempts to develop good solutions in digital markets should not necessarily target vulnerable consumers specifically but should aim to help all consumers, and help vulnerable consumers even more.

There should also be greater awareness raising of existing innovative solutions in markets.

There is a key role for government and regulators in joining-up to help share data on vulnerable consumers as well as a role for regulators in helping to incentivise firms to improve the quality of their data.

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