There are different views across the financial services sector about what firms should record and share about vulnerable customers. One camp says that firms should only share the person’s support needs: what the customer needs the firm to do differently when dealing with them. The other says that firms should also share the characteristics and circumstances driving those needs, such as a health condition, a bereavement or a caring responsibility.
Both views are held in good faith, and both have solid arguments to support them. Below we set out the case for each, and for a third option – one which suggests that firms and consumers use both. We also say where we think the answer lies.
The case for sharing only support needs
The strongest argument here comes from consumers themselves. Feedback from several quarters suggests that people simply want companies to know about the kind of support they need. They’re less interested in explaining why they need it.
Linked to this is fear. Many consumers are wary of handing over sensitive personal information, so the thinking goes that firms should not ask for circumstances at all – the assumption being that if you ask only for support needs, and more people will engage.
The third argument is a legal one: if you only record support needs, you’re not holding special category data under the General Data Protection Regulation (GDPR). This is a myth. The Information Commissioner’s Office has confirmed that where a support need implies a health issue, the support need is itself special category data. A request for large-print letters or for a carer to be present can point to a health condition just as clearly as naming the condition itself would. Firms which record support needs alone still need an Article 9 condition for processing, and the same safeguards as anyone else.
The case for sharing both circumstances and characteristics
There are more arguments to support this, and we find the combined use more persuasive.
The regulation expects it. Consumer Duty requires regulated firms to monitor and report on outcomes for groups of customers, including those with characteristics of vulnerability. You can’t compare outcomes for recently bereaved customers against the rest of your book if you never recorded the bereavement. The Duty also puts the onus on the firm to understand and accommodate customers’ circumstances. If the firm doesn’t know the circumstance, it can’t show that it has done either.
It’s how people talk. Some of the most common situations, such as divorce, bereavement and taking on caring responsibilities, are described in exactly those terms. People rarely say, ‘I need a single point of contact and a pause on letters and emails’. They say, ‘my husband died last month’. Asking them to translate a life event into a support need adds not only friction but also stress at a difficult time.
It lets firms act appropriately. Knowing that someone has a gambling problem, struggles to understand financial matters or has Alzheimer’s lets a firm take the right steps to prevent harm. If the only instruction a firm holds is a request, such as ‘please speak with my partner’, it may act quite differently than if it also knows the reason why. The same request can call for very different responses depending on what lies behind it.
Support needs differ from firm to firm. There’s a wide range of support needs, and intermediaries and manufacturers offer different ones. This causes three problems:
• If a firm only collects and stores the support it offers, that’s all it can share – so the next firm in the chain can’t provide anything more.
• The consumer has no way of knowing which support needs each firm can meet.
• We expect, and hope, that most firms will add support needs over time, so a record built around today’s needs dates quickly, whereas the circumstance stays true.
Consumers don’t know what they don’t know. Help with understanding benefits is a good example. Take-up is held back because many people don’t know that the support exists – and nobody asks for help they’ve never heard of. A firm which knows the circumstances can offer support the consumer would never have thought to request.
It helps charities reach the right people. Charities and self-help groups spend money on outreach to find the people they can help. Many focus on a particular condition or circumstance, such as cancer or dementia. If firms know the circumstances, they can signpost people to those organisations best placed to help, which is a far more economical route for the charity and a better one for the person.
Consumers will share. Our experience in practice is that consumers are happy to share their circumstances when they understand why they’re being asked – and how the information will be used. The fear that they won’t take part is unfounded. What matters is a clear explanation and a well-designed process.
The case for enabling both
The simplest argument of all is to let the consumer decide. Some people will be comfortable telling a firm about their condition or life event. Others will only want to say what help they need. A data-sharing approach supports both and respects consumers having that choice, rather than it being made for them.
It also gives flexibility. Circumstances and support needs can both pass between firms, so the receiving firm gets the fullest picture the consumer has agreed to share.
MorganAsh recommends that firms are able to collect and share both support needs and circumstances – and it is where many firms have migrated to already, regardless of where they started. This is the approach we have used in the MorganAsh Resilience System (MARS), is used by the Vulnerability Registration Service (VRS) and is endorsed by the Chartered Insurance Institute (CII) in its vulnerability guidance.
