For the financially vulnerable, economic shocks, such as an unexpected bill or a small dip in income, can have a significant impact on not only their financial health, but also on their wellbeing. With nearly seven in ten financially vulnerable people feeling stressed when dealing with their finances, it can be harder for these consumers to make informed financial decisions, putting them at greater risk of fraud and scams.

Credit is often a lifeline for vulnerable consumers to meet shortfalls in their finances. However, many can’t access the credit products they need – with low credit scores being cited as the most common reason that people had their credit application turned down.

This is where fintechs and financial service providers have a critical role to play. The industry needs to shift from a one-size-fits-all approach to lending, to one that recognises and adapts to the challenges vulnerable consumers face. Lenders should harness data to offer financially vulnerable customers the care and support they need to make informed credit decisions and improve their financial wellbeing.

We’re already seeing some innovation in this space, with fintechs developing tools that provide personalised financial insights, helping people take control of their money. Leveraging vulnerability and affordability insights can enable lenders to provide access to lower-cost credit and preventing borrowers from falling into problem debt.

We are the first credit reference agency to partner with the Vulnerability Registration Service, giving our clients access to an independent register of vulnerable individuals. This enables them to identify vulnerabilities and make informed decisions in accordance with regulatory guidance.

Ultimately, a fair and inclusive financial system is one that balances credit access with consumer care and protection. Through responsible lending and access to credit products tailored to the needs of financially vulnerable consumers, the industry can foster greater financial inclusion to ensure each consumer is reliably and safely represented in the marketplace. At the same time, businesses can empower consumers to avoid unmanageable debt and build financial resilience.