Companies need to do more to spot and support vulnerable customers, according to Huntswood, part of ResultsCX.
Just 29% of vulnerable customers said the organisations they deal with knew about their situation, 42% said their provider was unaware, and 29% were unsure.
Huntswood’s study found that 51% of adults were classed as vulnerable in 2024, up from 44% in 2023.
This rise was mainly due to almost double the number of people reporting mental health conditions, and more saying they felt financially stressed in 2024 (16.7%, up from 14.1% in 2023).
A large number of people still did not realise they were vulnerable, with 53% unaware in 2024, though this was down from 67% in 2023.
The Financial Conduct Authority (FCA) defines a vulnerable customer as someone “who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”.
The regulator said all customers could become vulnerable, based on health, life events, resilience and capability.
Support made a difference, with 82% of customers whose provider knew about their vulnerability but did not acknowledge it saying they were left unsatisfied, compared with 18% of those who felt their needs had been acknowledged.
Customers who did not feel supported reported more negative feelings like anger, sadness and disgust, while those who felt their situation was recognised were more likely to trust their provider and feel positive.
However, there has been some improvement over the last year.
40% of at-risk customers felt their financial services provider was doing enough to help them, up from 28% in 2023.
Martin Dodd, CEO at Huntswood, said: “Customer vulnerability is not a niche issue – it’s a widespread and evolving challenge.
“Firms must be able to identify their clients’ vulnerability with precision, empathy and speed. Vulnerability identification doesn’t necessarily require getting new information.
“Technology can and should play a critical role in achieving this. But data alone isn’t enough, it must be paired with good quality front-line staff training.”
Siddharth Parashar, managing director, UK & Europe, ResultsCX, said: “The FCA’s recent review on the treatment of vulnerable customers further raises the stakes for firms – with its proposed amendment to DISP that could expand eligibility for complaints made by individuals in indirect relationships, such as beneficiaries of pension schemes.
“It is therefore essential that service providers leverage technology not only to identify customers in vulnerable circumstances but also use it to inform how they deliver respectful and empathetic support at the frontline.”
