Financial services firms are failing to identify customers experiencing domestic and economic abuse, leaving many without appropriate support, warns vulnerability specialist and support services provider MorganAsh.
New data from the MorganAsh Resilience System (MARS) reveals that only 22% of customer vulnerability assessments conducted on the platform included questions on domestic abuse, with many firms omitting these questions in vulnerability assessments. Concerns of embarrassment, awkwardness and annoying customers are often perceived barriers to asking such questions.
However, in assessments which included the relevant questions, 5% of consumers disclosed that they were suffering from some form of abuse. This is comparable with nationally reported figures which range between 4-8%. The highest proportion identified by any company using MARS is 8% by a digital company providing loans.
MorganAsh says the findings point to a systemic gap across the wider financial services sector, despite strong trade body and charity guidance – specifically from the Surviving Economic Abuse (SEA) charity.
In addition to weaknesses in identification, assessment and monitoring, consumer advocates continue to identify structural obstacles, particularly around separation of finances, joint products, and coerced debt – as revealed in UK Finance’s From Control to Financial Freedom work and subsequent commentary.
Andrew Gething, managing director of MorganAsh, said: “Many firms are at present opting to not to include coercion or abuse indicators within their vulnerability assessments, for fear of annoying their clients. Social stigma on the topic, a finance industry predominantly managed by men, and fear of embarrassing conversations all lead to reluctance within the industry to even start to address the problem.
“While some firms have adopted the guidance of charities and trade bodies, this is mainly restricted to training frontline staff to be more empathetic and pick up the pieces when alerted to abuse – without making material changes. There is a need to embed identification, monitoring, support and reporting within firms in the same way as all other vulnerabilities. In truth though, there are still many firms falling short at this stage, lacking the knowledge, technology and data to identify and respond to customer vulnerability more broadly.”
New guidance recently released by the Chartered Insurance Institute (CII) with the Personal Finance Society (PFS) aims to give firms a practical implementation guide to managing customer vulnerability – helping to convert the principles of Consumer Duty into practical action. It focuses on the necessary IT systems, processes and data infrastructure required by firms to identify, classify, monitor, support and report on customer vulnerabilities and outcomes.
The warning from MorganAsh comes amid growing focus on financial abuse and coercion, including a new nationwide campaign launched by AXA UK, raising awareness of the hidden signs of domestic abuse. The CII has also launched a new guidance paperon economic abuse for general insurance providers, working with SEA to support good practice in the sector and create better outcomes for victim-survivors of economic abuse.
MorganAsh is a specialist in Consumer Duty and customer vulnerability. The firm launched its multi-award-winning MARS platform to help firms understand and monitor vulnerable customers and deliver good outcomes – as required by Consumer Duty. It is in use across financial services and the utilities sector, enabling businesses to adopt a consistent approach to identifying vulnerable characteristics and generate an objective Resilience Rating – much like a credit score.
The MARS platform meets the system requirements set out in the new CII vulnerability guidance, providing financial services firms with a proven tool that can be used as a standalone system or integrated into other systems via an API (application programming interface).
Along systems support, MorganAsh also provides consultancy and a range of workshops to help firms navigate their customer vulnerability journey.
