Chris Fitch, vulnerability lead consultant at charity Money Advice Trust and Research Fellow at the University of Bristol’s Personal Finance Research Centre, reflects on how the City regulator expects firms to design out vulnerability
Whenever the Financial Conduct Authority (FCA) publish a ‘Dear CEO’ letter, you can guarantee that some of the most interesting material won’t be in the actual note. Instead, it will be tucked away in an Annexe, buried in a fleeting webpage link, or in plain sight encoded in a press release.
And this was certainly the case when the FCA published “The rising cost of living – acting now to support customers” in mid-June. Based on new FCA research, this rightfully prompted immediate discussion about the failure of many firms to engage customers, understand their needs, consider a wider range of forbearance options, or signpost to external advice services.
However, in a linked webpage, one particular sentence caught my eye: “we expect firms to consider [vulnerability] when developing products or services…but we haven’t yet seen enough clear evidence of firms systematically doing this”.
So, what should firms make of this lack of visible evidence?
This statement from the FCA should not have come as a surprise to any firm. After all, good design was identified by the Financial Services Authority way back in 2006 as one of six outcomes in its Treating Customer’s Fairly work (Outcome 2: “Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly”).
Since then, ‘designing out’ the harms that vulnerable consumers might face has been repeatedly emphasised, running from Occasional Paper Number 8 in 2015, through all three versions of the FCA’s guidance on vulnerability from 2019 to 2021, and now in the imminent Consumer Duty. So, given the long-standing calls for such design, why isn’t there evidence of more firms doing this?
One reason is that designing for vulnerability can be difficult.
While talk about ‘inclusive design’, ‘universal design’, and ‘accessible design’ is plentiful in financial services, there are far fewer firms and people who know how to do this in practice. This is because designing products and services that anticipate the needs of vulnerable consumers, and which foresee and side-step the potential harms these consumers may face, requires more than creative flair: it demands an intimate and forensic knowledge of a firm’s customer base and target market.
Knowing Your Vulnerable Customer is absolutely key here. This means that good design is about good data (another FCA concern), good analysis of these data, and an ingrained and greater understanding across an entire firm of who our vulnerable consumers actually are, what challenges they face, and what part we can play in meeting these.
Consequently, doing this requires a firm to not only have design specialists. It requires an organisational culture that actively encourages and facilitates vulnerable customers to disclose their needs across a range of channels. And it relies on well-trained and confident staff who are able to identify, understand, and establish what these customers are practically vulnerable to.
Achieving all this takes work. However, the pay-off can be considerable.
If a firm can design products, services, or communications that anticipate and meet the support needs of vulnerable consumers, then these consumers can simply get on with using a firm’s products or services like everyone else.
For these consumers, this means not having to spend precious hours and days figuring out a ‘work-around’ to get a product to work for them. Or being forced to take the step of disclosing a vulnerable and intimate situation to a firm (which many consumers still fear). Or simply giving up, and disengaging from a firm and its communications, products, and services (often with resulting financial or other difficulties).
For consumers who are not vulnerable, there is also a pay-off. Here the changes that firms make to products, communications, and journeys to better support vulnerable consumers may also benefit them. For example, after Monzo launched their ‘gambling block’ (to give consumers greater control over stopping gambling expenditure), their research found that over 40% of surveyed consumers who had activated this feature reported they did not gamble and had instead turned on the block to provide protection against any fraudulent use of their account.
Such a finding should not surprise us though – after all, looking beyond financial services, there is a tradition of inventions originally designed for disabled people – such as the dropped kerb, electric toothbrush, or ‘easy-grip potato peeler’ – that have made everyone’s lives easier.
So how should firms go about practically achieving the FCA’s call on vulnerability and design?
The first option – as ever – is to read about how others have already done this. The Vulnerability Inclusion Handbook from Capital One is an example of a commercial firm practically sharing its methodology and approach to designing for vulnerability and inclusion. This offers a step-by-step guide to understanding the needs of vulnerable consumers, and ‘baking’ these in to the design process.
Another key resource are two guides on inclusive design from Fair By Design and the Money Advice Trust. One guide unpacks how firms and suppliers can implement inclusive design approaches. The second guide outlines how the regulator itself might achieve this in its policies.
For those interested in the design of digital channels and journeys, the Cognitive and Learning Disabilities Accessibility Task Force’s (COGA) guidelines useful, while the ever-green guidance on effective communications design in the Behavioural Insight Team’s ‘EAST’ approach still remains relevant today.
However, while reading about vulnerability design is critical, there is probably no better option than spending time with a designer who has practically done this.
For most of us, design is invisible. Until it fails. As it stands, designing for vulnerability within financial services remains a highly visible discussion. Here the FCA have publicly stated their concern that not enough firms are ‘designing out’ the harms that vulnerable consumers can encounter. And this concern is arguably heightened by the fact, that design has been part of the treating customers fairly agenda since at least 2006. Firms, however, can take practical steps to address this challenge, and in doing so, ensure that design for vulnerability becomes embedded in their processes, ‘baked-in’ to their culture, and ultimately invisible to the consumer.