Many firms that we engage with believe their training, processes, and support tools are well-designed to mitigate the risk of harm to vulnerable customers. However, many struggle to substantiate and evidence this belief with measurable data and effective outcomes testing. Often, this challenge stems from a limited, one-dimensional perspective on vulnerability and a failure to embed a culture that moves beyond viewing ‘vulnerability’ as a mere compliance term.

From what we have observed across the market, several key factors contribute to these shortcomings:

A strong foundation for good outcomes begins with a comprehensive understanding of the types of vulnerabilities that are prevalent in your target market and customer base. Firms must move beyond a generic ‘vulnerable customer’ label and adopt a data-driven approach to identify cohorts of vulnerable customers and their needs, and measure for effective support strategies. Defining what good outcomes look like for those cohorts of vulnerable customers – tailored to different customer needs – is crucial for success.

Early customer interactions set the tone for the overall relationship. Missed opportunities in these initial stages can have lasting effects. Incorporating root cause analysis within the outcomes monitoring framework can enhance disclosure rates and drive better customer outcomes. Firms that proactively identify and address gaps early on will be better positioned to support their vulnerable customers.

Training should empower staff to understand the deeper implications of vulnerability, exploring how personal circumstances impact customers and their needs whilst also demonstrating empathy. Building critical thinking and decision-making skills will allow teams to provide more meaningful support.

The FCA’s review highlights the importance of flexibility in solutions. Empowering staff to step outside of rigid processes and standardised support tools is key to delivering good outcomes. Customers should not be forced into predefined solutions that do not meet their unique needs. However, many colleagues fear deviating from established processes due to concerns about quality assurance failures, performance targets, or even financial incentives.

Firms must create an environment where colleagues feel confident making customer-centric decisions, tailored to the specific support needs of the customer, without fear of negative consequences. An effective outcomes monitoring framework that measures against a defined suite of good customer outcomes is critical to empowering flexibility and empowerment.

Effective monitoring of vulnerable customer outcomes requires curiosity and creative analysis. Firms must look beyond surface-level data, identify anomalies and investigate underlying patterns. Acting on these insights enables continuous improvement to meet customer needs effectively.

By addressing these key factors, firms can enhance their approach to vulnerability and outcomes monitoring, ultimately improving customer experiences and meeting regulatory expectations. For further insights, explore Square 4’s publications on Outcomes Monitoring and Fair Treatment of Vulnerable Customers, available on our website.