Consumers are more willing to complete vulnerability assessments than financial services firms believe, new data from the MorganAsh Resilience System (MARS) reveals.
Users of MARS, including those in advice, credit, debt and insurance sectors, report high consumer response rates to customer vulnerability questionnaires – used by firms to meet the requirements of Consumer Duty – with the fastest responses received at the point of sale.
When assessed online, 95% of people under the age of 80 complete the questionnaire – when integrated into an existing engagement process. The remaining 5% are guided by an agent or adviser. Above 80 years of age, this understandably drops to 71% of consumers completing online questionnaires themselves, with nearly two-in-ten helped by firms.
Across all ages however, the vast majority of consumers engage online with vulnerability assessments when part of an existing engagement process. Many MARS users do also offer manual assessment methods where instead of digital channels, advisers will complete the assessment on the client’s behalf – either by phone or in person. This helps take completion rates to 100%.
MorganAsh also found that, on average, 84% of consumers complete a MARS vulnerability assessment in eight minutes or less, while just over half (55%) does so in five minutes or less. The results address unfounded concerns in the market around elongating fact-finds or the sales process with vulnerability assessments.
Demonstrating the value of vulnerability assessments, the MARS data shows that the mean number of vulnerabilities among consumers is 2.3 per person. This is in line with the recent findings of the FCA’s Financial Lives survey, which found that 26 million UK adults (49%) are living with one or more characteristic of vulnerability.
Users of MARS report that their proportion of vulnerable customers is in line with the FCA’s data, while elsewhere in the market, firms still report vulnerable customers in single figures or even zero – according to research by the regulator.
Andrew Gething, managing director of MorganAsh, said: “The MARS data is really encouraging as it demonstrates how willing consumers are to cooperate with vulnerability assessments – something that many firms have long been sceptical about. It also shows that this doesn’t have to be a laborious process – there are high levels of completions and most completed in good time too. In truth, there’s no reason why firms should not integrate vulnerability assessments into their processes – to really understand their customers, the outcomes they receive – and to have sufficient data to improve service and meet the requirements of Consumer Duty.
“Being able to quickly understand consumer characteristics and circumstances is equally applicable to targeted support, as proposed by the recent FCA’s Advice Guidance Boundary Review. Once you understand your customers’ circumstances, it becomes far more appropriate to provide targeted support – while the opportunity to provide this using automation becomes far more realistic.
“We continue to strengthen MARS and its customer vulnerability assessment – to offer firms much greater personalisation and configurability. This means they can choose the length and breadth of the assessment, based on their use-case and appetite for risk. There’s also the opportunity to modify the follow up – plus different tools to suit the customer journey. We support this work with our own consumer-facing portal that helps to educate consumers on the importance and value of engaging on questions around health and lifestyle characteristics and potential vulnerabilities.”
