The Investing and Saving Alliance has launched an online tool to help firms improve their work with vulnerable customers.
The cross-industry body announced today (February 6) it has created a free online test through a partnership with consultancy firm Altus to help firms identify where there are gaps within their vulnerable customer policy and how they could improve.
When using the tool, named the Vulnerability Radar, firms answer a number of questions relating to policy, products, systems and implementation.
These answers are then assessed against best practice and provide a score, spider graph result and a series of recommendations on how to meet the regulator’s expectations.
The Vulnerability Radar has been tested with 12 financial services firms, including Quilter and Aviva, and the development process has included feedback and direction from the Financial Conduct Authority.
Last summer (July 23) the FCA promised to take action against firms which did not treat vulnerable customers fairly and launched guidance on the issue.
At the time the City-watchdog said there were still cases where firms had clearly failed to consider the needs of these customers and that it would take action against any firm which continued to fail to improve its standards.
The FCA later released guidance on four main areas for financial services firms to consider: understanding the needs of vulnerable consumers, skills and capability of staff, taking practical action, and monitoring and evaluation.
Tisa and Altus hope the tool can help firms fall in line with the FCA’s expectations as well as providing them with a series of documents to prove the progress they have made.
Speaking to FTAdviser, Jonathan Warren, consultant at Altus, said the tool could be used by any firm, big or small, to improve its understanding of vulnerable customers and the issues surrounding them for financial firms.
He said: “Vulnerable customers are central to the regulator’s agenda and rightly so, as we seek to ensure good outcomes for those in society for whom navigating the complexity of financial services is more challenging.
“It is, however, undeniable that identifying and supporting vulnerable customers on a sensitive and emotive issue will be complicated and require significant change to culture, operations, systems, governance and the training and skills of employees.”
Stephen Gay, Tisa’s policy manager, said everyone has either been vulnerable, would become vulnerable or care for someone vulnerable at some point in their lives.
He added: “This is why ensuring the right protections are in place needs to be a fundamental part of how firms design, develop, and bring to market their products and services.
“Concerns around financial exclusion are rightly set to continue, and vulnerability issues are likely to remain high up the regulatory agenda for some time to come.
“By developing an easy to use tool, we hope to help firms adapt to regulatory changes, and ultimately create a more supportive environment for UK consumers.”