With two British adults out of three self-declaring a vulnerability (including almost one million individuals with dementia and nine million without internet access), are you really sure your customer experience (CX) is inclusive and would stand up to regulatory review?
The Pandemic And Cost-Of-Living Crisis Have Increased Vulnerability
Over the past few years, many have endured cumulative stresses not witnessed for generations. First, there was the global pandemic. A cost-of-living crisis quickly followed, producing the highest inflation rate seen in the UK for over 40 years. These hardships have been exponentially more challenging for individuals and groups in vulnerable circumstances.
Confirming this, in its 2022 Financial Lives survey, the Financial Conduct Authority (FCA) discovered that the number of consumers exhibiting characteristics of vulnerability had surged by nearly one million since 2020. This dramatic increase was primarily attributable to growth in the proportion of adults with low financial resilience who described themselves as “heavily burdened” by household bills and credit commitments.
Low Financial Resilience Drives Vulnerability
The FCA survey firmly established that low financial resilience has emerged as an increasingly crucial driver of vulnerability, driving up the total share of UK adults displaying one or more characteristics of vulnerability to 47 percent (24.9 million) by May 2022. However, it is critically important to recognize that vulnerability stems from more than someone’s financial status.
With an aging population, organizations are increasingly dealing with customers who have conditions such as dementia (900,000 people are living with dementia in the UK) and people who may have difficulty accessing non-traditional customer communication channels such as live chat.
Concerningly, while awareness of vulnerable consumers appears to be high, particularly amongst companies operating in regulated industries, there is still a lot of progress to be made to establish, implement, and maintain good practices in dealing with vulnerable customers.
New Regulations Require Supporting Vulnerable Customers
Interestingly, while the 31st of July 2023 marked a significant date for all UK customers of financial services, ironically, few are aware. This date marked the official “go live” commencement of the new Consumer Duty regulations developed to ensure financial services organizations consistently provide vulnerable customers with fairer, more inclusive, and more appropriate outcomes.
Reviewing the details and requirements of the Consumer Duty regulations, one key component places heightened obligations on firms to ensure vulnerable customers can be effectively supported and not disadvantaged or excluded because of their vulnerability—with the definition and scope of vulnerability implicitly being far broader than financial vulnerability.
The FCA’s approach here mirrors similar existing and evolving regulatory strategies from other UK regulators, including Ofwat and Ofgem in other industry sectors. While the ramifications of this are still somewhat muted and yet to be fully felt, the hope and expectation is that they will ultimately deliver substantive positive impacts and benefits for all customers over the long term – even if they don’t fully realize it.
Personal Experiences With Vulnerable Customers
Over the past 12 months, I have personally experienced both the highs and lows of customer experience through the eyes and ears of a vulnerable customer – specifically my 85-year-old father, who was recently diagnosed with early-stage Alzheimer’s dementia.
Imagine attempting to successfully undertake a complex identification and verification process exclusively over the phone with an individual who, on bad days, cannot accurately recall or communicate their own address or date of birth.
Yet this profound challenge is certainly not restricted only to the 900,000 people currently displaying symptoms of dementia (estimated to grow to 1.4 million people over the next 12 months).
With over 47 percent of the UK population now exhibiting one or more substantive attributes or characteristics of vulnerability, the scale of this issue extends far beyond just those with cognitive decline or impairment.
Creating a CX Strategy Fit For The Future
Addressing the challenges experienced by vulnerable customers undoubtedly creates an improved experience for all customers – so take a moment to consider how your end-to-end customer experience works for the:
- Nine million UK individuals who do not have access to the internet. (Source: Lloyds Bank)
- 90 percent of individuals with seriously impaired vision who can’t read Braille. (Source: RNIB)
- 80 percent of customers that rank phone as their preferred channel. (Source: Calabrio)
Fortunately, this is not an issue without solutions:
- Live and recorded speech analytics can be used to detect multiple attributes of potential vulnerability
- Vulnerable customer personas can be used to assess journeys
- Syndicated data sources exist to identify financial and non-financial vulnerability
Find the Right Balance for CX Success
An effective customer experience strategy balances competing priorities: Investing while controlling costs, efficient AI with empathetic agents, and meeting employee needs alongside customer expectations. Here are eight things to consider in your quest for a better customer experience:
- Leverage available data – Use insights to empower teams to handle varied, complex inquiries
- Keep human connections – Ensure that the high-value conversations between customers and agents reach humans irrespective of channel
- Empower your teams – Build a multiskilled workforce who can respond flexibly to changing customer needs
- Support your teams – Use AI to aid specialist agent skill sets and drive efficiency
- Maintain CX initiatives – Fix poor experiences through training, tech upgrades, and process improvements
- Walk in your customers’ shoes – Engage representatives of vulnerable groups in your focus on CX transformation
- Phase changes gradually – Limit customer-facing platform overhauls where possible to reduce change fatigue
- Consistently bang the drum – Continually articulate your company purpose and values to unite customers and employees.
As an industry, we shape the customer experiences of the future, so we must design with empathy while staying mindful of potentially vulnerable customers —because any one of us could find ourselves in their shoes.
Thanks to Philip Michell, a Consulting Director in Davies Consulting’s CX Practice, for writing this article.
Over the past 35+ years, Philip has worked with some of the World’s most recognized and respected brands to deliver successful customer-centric transformation – specializing in operational transformation, strategic outsourcing, and business change.
For more from Philip on vulnerable customers, he has released a new white paper available on the Davies Consulting website.