Numerous firms would benefit from assistance to better understand the characteristics of vulnerability and identify vulnerable customers.
This is according to research from the Chartered Insurance Institute (CII), in partnership with FWD Research.
The CII undertook a survey of its members in July 2024 of those directly involved in Board reporting about the challenges they had encountered in producing the first Consumer Duty reports.
Off the back of this research and a roundtable discussion, the CII has published a white paper “that seeks to support firms’ compliance with the Financial Conduct Authority’s (FCA) reporting requirements under the Consumer Duty legislation”.
Roundtable attendees also said they would welcome advice on storing and sharing information on vulnerable customers.
Most firms said they would “welcome more guidance” from the regulator on how they should meet the reporting requirements.
But other firms said that the time being invested in the reporting process helped to shape internal conversations that had already driven positive changes for their customers.
Following this research, the CII has recommended that firms should:
- Ensure that data and reporting requirements are used not only to satisfy reporting requirements, but are baked into product, service and process improvement cycles
- Work with professional bodies to develop research best practice
- Identify whether they have a robust understanding of vulnerability for their customer base
- Place more emphasis on joining the data dots around individual customers or customer groups in real time
- Ensure that leadership teams in firms take an active interest in reviewing customer needs
CII Group chief executive Matthew Hill said: “The Chartered Insurance Institute sought experiences of writing these initial reports to understand any challenges that might have been encountered, and to make recommendations that might assist other firms in future.
“We are sharing our findings and recommendations with the FCA and the wider sector through this white paper, and we will continue to explore with the regulator and our members what more we can do to assist firms in meeting the standards of care expected from the introduction of the Consumer Duty.”
FWD research director Martin Grimwood added: “It’s clear that many firms have yet to understand vulnerability among their customers.
“Without a top-down view, which quantifies how prevalent different types of vulnerability is within a customer base, it is difficult for firms to create informed strategic plans that will meet the needs of vulnerable customers.
“We are delighted the CII have chosen to endorse our approach to understanding vulnerability and look forward to helping CII members implement this key requirement of the Consumer Duty and vulnerability guidance.”
Is the purpose of all this research, roundtable discussion and the CII’s white paper to address what may well be little more than imagined deficiencies in how firms identify and address possible vulnerabilities in a tiny minority of clients? Or is it, as I rather suspect, primarily to impose yet more bureaucracy in terms of compliance with the FCA’s reporting requirements under the Consumer Duty legislation?
Are these requirements supported by any clear data that firms have been failing in terms of identifying and addressing possible vulnerabilities? Or is it just a speculative hunch on which the FCA is basing its justification for yet another “initiative” that may well not really be needed at all but which will (in the mind of the FCA) justify the continued employment of a number of otherwise largely useless people who would otherwise be resoundingly under-employed and thus a waste of OPM?
I buy none of this and agree with Julian Stevens. HSBC UK, six ways to Sunday, desperately tried to block a phone recording, not cut but wiped clean.
An FO Service (FOS) claimed ‘investigator’ (not an Ombudsman) then cut a dodgy deal with HSBC to the delight of HSBC multiple claimed professional experts presumably in on the deal.
The FOS (a subsidiary of the FCA) management, twice on recorded coincidence, encouraged such autocracy.
God forbid such youngsters are let loose on vulnerable, or any, people unable to unearth a true recording from below a ‘wiped’ nothing-burger.
The FOS management will assuredly stonewall the true recording while the FCA washes its hands of fecal matter avoided by its apparent partner in crime. Done.
CII trying to become a quasi-Regulator again?