The identification and treatment of vulnerable customers continues to be an area of focus and priority for the industry, with the need for financial institutions to rebuild trust remaining high on the agenda.

Through our oversight and development work, we are understanding how registered firms have been developing their policies and processes around vulnerability and how the solutions being implemented can bring positive change for their customers and staff. The work in this space needs to continue, since there are still challenges across the industry in ensuring customers in vulnerable circumstances receive support that is timely and meets their needs. Our move from prescriptive rules to an outcomes-based approach saw vulnerability come to the forefront of our thinking and we have been busy leading on industry discussions around this theme.

As part of our vulnerability agenda for 2018, we plan to continue these conversations whilst conducting targeted oversight, research and development work with our registered firms and other key stakeholders in the industry.

We currently have three specific pieces of work underway:

  • Vulnerability Taskforce principles and recommendations

Working with UK Finance, we will be conducting oversight activity into how our registered firms are meeting the principles and recommendations from the Vulnerability Taskforce report which was published following the release of the FCA’s Occasional Paper N.8 – Consumer Vulnerability. Our assessment will consider vulnerability across the customer lifecycle and products including unsecured lending, savings and mortgages. The work will also focus on progress being made towards the implementation of the Third Party Access Principles which are due to be in place by March 2019. We will look to publish updates on this piece of work in the coming months.

  • Exploring vulnerability in the context of a small business customer

We are undertaking a joint piece of research with the Money Advice Trust to understand the nature and impact of a vulnerable situation in the context of an individual or individuals running a business. While considerable research has been conducted to explore how vulnerable circumstances can impact personal customers, the impact of vulnerability on a small business is an area that remains largely unexplored. This research will begin to delve into this topic, taking into account the impact on the individual and the business. We aim to publish the results of our research in late spring/early summer.

  • Vulnerable customers mystery shop

We are keen to understand how well our registered firms are meeting their obligations within the Standards of Lending Practice in respect of the identification and treatment of vulnerable customers. As part of our oversight we will look at alternative ways through which we can gain a view on adherence to the Standards, and on this occasion we have undertaken a mystery shop exercise.  This work has been conducted over the last three months and we will look to provide a more detailed update once the process has been completed.

The first half of 2018 will see a very busy agenda around vulnerability but we are confident that the outcome of our work will continue to add value to our firms. Updates on how we are progressing with this work and all of the other activity we are planning to undertake throughout the year will be shared with our firms and the industry in due course.