The FCA's Expectations for Fair Treatment of Vulnerable Customers
With this week marking four months since the beginning of the lockdown in March 2020 and some early signs of recovery currently on the horizon, now is the ideal time to turn our minds to training. With some furloughed staff due to return to work over the coming months, it’s more important than ever to refresh skills and knowledge – especially in cases where staff won’t be aware of recent changes. It’s also the case that we’ll be working with more potentially or actually vulnerable customers than before.
The true impact of the pandemic on the UK’s economy – and on individuals’ finances – won’t be clear for some time, but the ONS suggests that the number of employees on UK payrolls is down 650,000 since March 2020, and that hours worked has continued to fall. Those who are self-employed and those in part time work are also seeing reductions in total hours worked.
It is worth bearing in mind that income shock – or an unexpected loss of income - is counted as one of the FCA’s examples of potential indicators of vulnerability in customers. Importantly, the UK’s economic recovery may take some time, meaning that these income shocks are unlikely to be temporary. As a result, many more customers are likely to be actually vulnerable over the coming months.
Crucially, the current circumstances have the potential to affect a large number of people – regardless of previous job security or income levels – and it’s important to bear in mind that those with previously high incomes but low savings and high outgoings are just as likely to be struggling and potentially vulnerable as those with lower incomes. Whether someone is vulnerable depends on individual circumstances, so it’s crucial that front line staff can identify them.
Why is this important?
The FCA have signalled that although they will halt some previously planned work, they will continue with work to ensure that the most vulnerable are protected. The regulator’s recently published guidance on the fair treatment of vulnerable customers has made clear that they will monitor firms’ use of the guidance and hold firms to account if they breach the Principles. In short, the FCA expect firms to embed a culture of doing the right thing for vulnerable customers.
Fair treatment of these customers is high on the FCA’s priority list for the next three years. Over the coming months, the FCA’s priorities are to ensure that:
Consumers can find products that meet their needs
Consumers do not become over-indebted by being given credit they cannot afford
Affordable credit is available
Consumers can take control of their debt at an early stage when they fall into financial difficulty
With the FCA’s increased focus on fair treatment of vulnerable customers, it isn’t just the identification of customers that’s needed, but knowledge of how to assess their needs and select appropriate support options. The FCA expect firms to look at good customer outcomes, rather than at whether individual rules have been met and this calls for well trained staff.
Training staff on identification and proper support for vulnerable customers
Training in the current climate needs to be easily accessible – traditional training methods must be supported by online learning. Game-based learning offers undeniable advantages. An online game system – accessible via laptop or smartphone - is much faster for the user than usual e-learning, and can be completed in breaks in between calls, or on the journey to work.
Learning is done in bite-sized chunks, rather than over the course of a single afternoon. This ‘little and often’ approach is infinitely preferable to cramming the subject matter into a four-hour seminar, and with the added bonus that fun, game-based learning means that retention is much higher than for standard classroom-based training. Platforms are designed to encourage regular training, meaning that staff are more likely to put their learning into practice on the job.
The FCA’s focus on ensuring that firms properly train their staff on identification and proper support for vulnerable customers makes engaging, regular and up-to-date training more important than ever. Our platform provides analytics, meaning that proactive provision of evidence of current and ongoing staff training to the regulator is possible. Ultimately, it also means that staff are engaging on a regular basis with training in support for vulnerable customers, meaning achieving the right outcomes for these customers is more likely.
It isn’t just front-line staff who benefit – the FCA are set to measure and assess fair value for consumers in the design of products and services, to ensure that vulnerable customers are not exploited or targeted with poor value products and services, and that access to key products and services is fair.
To find out more about the benefits of a game-based approach to learning and how to train a remote workforce, join our 45 minute webinar on 18 August 2020 at 3pm BST.