Firms must act sooner to identify customers facing financial difficulties, says MorganAsh
Andrew Gething said: “We should have clear processes in place to modify products and services where necessary and to provide appropriate support.”
MorganAsh said financial services firms should take a more proactive approach to identifying customers facing financial difficulties.
This comes after research from the Building Societies Association (BSA), published ahead of UK Savings Week, found money worries had affected the work performance of 22% of UK workers.
It also found 19% had taken time off because of illness caused by financial stress.
A total of 27% of UK adults had less than £1,000 in savings, while 21% could not cover an unexpected £300 expense.
Andrew Gething (pictured), managing director at MorganAsh, said: “The BSA’s findings show just how far the consequences of financial difficulty can extend beyond the pounds and pence.
“It can have a detrimental impact on a person’s health, their confidence, their ability to work and ultimately, their ability to engage with financial services firms and make important decisions.
“The big question for these firms is: would they actually know if one of their customers was struggling?”
Gething added: “Financial difficulty can be an important indicator that a customer’s resilience is under pressure, but it may not be something that a customer is willing to disclose.
“Furthermore, customers may not consider themselves to be vulnerable – particularly if they are managing to cover their main commitments.
“Without that deeper understanding of the client’s wider circumstances, a firm may not see any otherwise obvious signs of difficulty.”
He said: “This is why firms need to take a genuinely proactive approach to identifying customer vulnerability, supported by the right systems, processes and data.
“Rather than waiting for customers to share difficulties or relying on front-line staff to spot signs of financial distress, we need to proactively identify potential indicators of a customer’s change in circumstances.
“We should have clear processes in place to modify products and services where necessary and to provide appropriate support.”
He said: “Consumer Duty has reinforced the importance of firms understanding their customers and delivering good outcomes, and effective identification and management of customer vulnerability is a critical part of that.
“The better firms become at recognising when someone may be struggling, the earlier they can step in with the right support – potentially preventing a difficult situation developing into a far more serious one, all while building trust and loyalty among their customer base.”
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