MorganAsh has unveiled the latest findings from its Resilience System (MARS), identifying consumer engagement as the largest area of vulnerability.
The report highlighted that consumer engagement, encompassing factors such as language proficiency, digital interaction skills, and susceptibility to coercion, is the most significant issue faced by users of the MARS system, affecting approximately 12% of consumers.
MARS evaluates vulnerability based on three primary characteristics: health, wealth, and life events – which align with the categories specified by the Financial Conduct Authority (FCA). It also considers three secondary factors: financial capability, engagement capability, and support network. Interestingly, the data revealed that physical health issues were more prevalent than mental health issues among users.
The system can identify over 400 variations in characteristic and circumstance that may contribute to consumer vulnerability, providing a comprehensive tool for businesses to evaluate and address these areas. These insights are particularly valuable as companies are increasingly implementing vulnerability assessments to comply with the forthcoming Consumer Duty regulations, set to be enforced by July.
Andrew Gething (pictured), managing director of MorganAsh, said: “As firms begin to receive detailed analysis of consumer characteristics from vulnerability systems, it’s illuminating to see MARS users identifying engagement as a key challenge. Fortunately, modifying a client’s communications strategy to tackle engagement issues is a relatively understood issue.”
Gething also addressed the complexities surrounding customers with limited financial knowledge engaging with self-serve non-advised services. He noted that while many firms are hesitant to deter these customers, the enforcement of Consumer Duty could level the playing field. However, he stressed the need for more data to better understand these dynamics.
MARS is designed to help firms understand, monitor, and deliver good outcomes for vulnerable customers – a core requirement of Consumer Duty. By providing clear and consistent assessments, businesses can identify vulnerable traits and generate an objective Resilience Rating, similar to a credit score.
Last year, MorganAsh added tailored questions to its MARS vulnerability assessment focusing on potential coercion. This enhancement enables firms to better gauge each client’s vulnerability to coercion or scams, contributing to their overall Resilience Rating.
