Since the Royal Commission, the regulators thinking around vulnerable customers has come a long way.
ASIC’s new product intervention powers and the widely anticipated outcomes of Consultation Paper 325, which will bring new product design and distribution obligations, will widen the remit of ‘fair treatment’ beyond simple disclosure. It’s a positive step, that will hopefully go some way to avoid vulnerable customers falling foul to the mis-selling of unsuitable products, and the harm that comes with it.
But vulnerability comes in various shapes and sizes, making it difficult to neatly categorise the needs of vulnerable customers. It can be permanent, temporary or intermittent. It can reveal itself at any stage of the customer journey, not just when a customer buys a new product. Your customers could experience a signiﬁcant, rapid change in their circumstances at any time and it’s up to your staff are able to recognise the triggers and signs.
What makes it so hard to spot?
- Customers may not believe themselves to be vulnerable
- It might be hard for your customers to ﬁnd the words to express what they’re going through or they might not wish to disclose it at all
- Customers might fear that their disclosure will be met with a bad reaction, or they’ll be treated badly as a result
- Customers might be unaware that disclosing this information may make it easier for the ﬁrm to provide the level of service the customer needs.
Getting your approach right is a challenge, but identifying and assisting vulnerable customers has never been more important than it is right now. The impact of the Coronavirus pandemic will be widespread and many consumers will find themselves to be vulnerable for the first time. Existing vulnerable customers might find their circumstances even more difficult to manage, with debt often snowballing in times of stress.
So, here’s the top three ways you can support your front-line staff to treat vulnerable customers fairly:
- Transparent culture
If you promote a customer-centric culture, and your staff live and breathe it, your customers will feel more comfortable and at ease about disclosing their personal circumstances to front-line members of staff. What’s more, an open and transparent culture, without unnecessary barriers to disclosure, will make it easier for your staff to act appropriately in their treatment of those customers.
- Flexible systems and processes
You should have policies and procedures in place so that there is a documented process for handling all customers fairly. But, it’s equally important to ensure these policies and procedures are ﬂexible enough to enable front-line staff to accommodate the needs of vulnerable customers.
- Appropriate Training
Training should cover the wide range of possible ways in which customers may indicate their circumstances, including clues such as tone of voice, confusion and misunderstanding. Staff should then be trained on the most appropriate way to handle the wide selection of vulnerable circumstances they may encounter.
Although it’s not necessary for all members of customer-facing staff to be experts in the treatment of vulnerable customers, all staff should be able to manage a conversation around a sensitive issue and identify when it is appropriate to refer the case to internal specialist teams.
Getting these three areas right can lay robust and consistent foundations that enable front-line staff to accommodate the needs of any customer, and ultimately deliver positive outcomes in the most testing of times.