Nisha Arora, the regulator’s Director – Consumer and Retail Policy, became the latest FCA speaker to talk about treatment of vulnerable customers when she addressed The Investing and Saving Alliance (TISA) conference in February 2020.

More than 200 financial services firms are now members of TISA. The organisation’s About Us website page uses many of the phrases that are now familiar to anyone who has read recent FCA guidance on customer vulnerability:

“The Investing and Saving Alliance’s (TISA) ambition is to improve the financial wellbeing of UK consumers by bringing the financial services savings industry together to promote collective engagement, to deliver solutions and to champion innovation for the benefit of people, our industry and the nation.

“We do this by focusing on good consumer outcomes and harnessing the power of our broad industry membership base to deliver practical solutions, new digital infrastructure and by devising innovative, evidence-based strategic proposals for government, policy makers and regulators.”

The central theme of the speech was that the FCA wishes to “change the discourse” on the topic of customer vulnerability. Many firms will have devised compliance monitoring

plans and the like by carefully reading the individual rules in the FCA Handbook that apply to them. However, when it comes to vulnerable customers, this approach will not work. Fair treatment of customers needs to become a central plank of firms’ culture, processes and practices. Firms need to consider the specific needs of the most vulnerable members of their customer base, and then devise solutions to address these needs.

The idea that each firm might have vulnerable customers who require different solutions was explored by Ms Arora when she said:

“Our aim in issuing guidance, rather than prescriptive rules, is to encourage firms to consider the guidance through the lens of their own business and decide which actions they need to take to meet the needs of their vulnerable customers. This cannot be a ‘one size fits all’ approach.”

The FCA director then said that understanding the vulnerabilities of their client base was the first step firms are expected to take. The next three stages of the vulnerable customer journey are:

  • Assessing the skills and capabilities of the firm’s staff. If this assessment suggests it is necessary, a firm could incorporate vulnerability issues into existing training for some or all staff, or could use external resources, such as visits from representatives of relevant charities, to inform staff about a particular vulnerability
  • Taking action to assist vulnerable customers, including:
  • Product design – the needs of vulnerable customers can be considered both when designing new products, and when amending and refining existing products. Here the speaker commented that the FCA’s vulnerability guidance paper mentioned “one firm that built a function into their app so that customers could disclose their personal circumstances and their needs”
  • Customer service – here Ms Arora’s example was an insurer that normally expected its customers to fill out a long online application form, but there was also the option for anyone who was uncomfortable with this to provide their details in a phone conversation
  • Communications – the FCA director made the important point that many experienced staff within financial services never stop to think that the general public don’t understand financial matters particularly well. She urged firms to check that the customer understands what is being proposed, and to offer them extra explanations or additional thinking time if needed, to ensure they can make an informed decision. The specific example here was a firm that sent communications via email rather than paper to a visually impaired customer, as he could read emails via his own text-to-speech software
  • Monitoring whether these actions have been successful, and making amendments to practices and procedures as required

Ms Arora said the FCA will issue more vulnerable customer guidance later this year.


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