Concerns over bias in assessing customer vulnerability appear to be unfounded, potentially delaying progress on meeting Consumer Duty requirements and supporting customers, according to data from MorganAsh.
The findings from the MorganAsh Resilience System (MARS), showed that differences in identifying vulnerable customers were minimal, with an average variation of just 1% between assessments done by agents and those by customers directly.
Among severe characteristics, the variation was only 0.1%, with over 90% of characteristics showing less than a 2% difference.
Andrew Gething (pictured), managing director of MorganAsh, said: “Despite the clear remit from the FCA and Consumer Duty, firms often delay assessing customer vulnerability because they are concerned about bias in the method used.
“While our data is not definitive for every type of business, all of our evidence suggests that any concern of bias is far less of an issue than feared.
“Benchmarking data between methods, distribution channels, offices and against the FCA’s own data is the best way to analyse the effectiveness of different methods.”
Gething added: “In all methods though, there absolutely needs to be a clear classification system to provide consistency in the data and enable meaningful analysis.
“MARS uses an objective severity range for each characteristic to generate an overall Resilience Rating for each customer.”
He said: “This will update with every assessment – and as characteristics change throughout the customer journey.
“It can be reported against and is shareable throughout the distribution chain, helping to meet the requirements of Consumer Duty and the demands of a regulator that actively wants to see better quality data and greater supervision of outcomes for vulnerable customers.”
