Survey reveals lack of consumer awareness around their own vulnerability status

The majority of UK customers don’t even realise they are vulnerable, states NICE – the leading global AI customer service technology provider – in its new Vulnerable Customer Report. The study has found that only 17% of UK consumers self-identify as vulnerable, despite 67% being deemed as potentially vulnerable when assessed against Financial Conduct Authority (FCA) criteria. This gap in awareness could have dangerous consequences for both consumer and business as vulnerable customers are left without adequate support when they need it most at a time and regulators are tightening rules.

Common misconceptions

The survey found that 39% of respondents mistakenly believe that vulnerability is solely dependent on age and only applies to those aged 65 and over. Yet, 38% of respondents in all other age groups said they would struggle to meet an increased rent or mortgage payment of just £50 per month, putting them in an extremely vulnerable position financially. In contrast, just 14% of over 65s felt heavily burdened by bills and credit payments. This group was also least likely to have changed their behaviour due to financial pressure in the past year.

Consumers refuse to talk

However, even when vulnerability is self-identified, the survey found that consumers may not be willing to talk about it. Almost three quarters (71%) of consumers correctly identified poor mental health as a driver of vulnerability, but over one third (38%) would still not be comfortable sharing details of poor mental health with a customer service advisor. This rises to almost half (47%) for those who identified as currently experiencing poor mental health in the survey. This puts customer service agents at a disadvantage when trying to offer support to vulnerable customers.

Hidden vulnerability

In collaboration with Focaldata, NICE surveyed over 2,000 UK adults to debunk vulnerable customer misconceptions, highlight the complexity of identifying vulnerability, and assess how needs differ across each consumer group. Each participant was surveyed against the FCA’s four key drivers of vulnerability, which range from financial to emotional.

Based on the findings, the report lays out five hidden consumer groups at risk of vulnerability that all businesses should be aware of:

Unexpected Carers: Suddenly becoming a main carer for a close family member isn’t easy. 30% of this group admit low confidence in managing money, and almost a quarter are hiding money problems from family.

• Ground-Down Gen Z: Age is nothing but a number. Forty-two per cent of this group admitted the leading cause of financial pressure was high energy and utilities bills. Twent-five per cent have used buy-now-pay-later schemes in the last year, but 16% say they have missed payments.

• Striving Renters: Only 21% of striving renters (who are typically aged between 25 and 44) self-identified as vulnerable, but as many as 83% could be at risk according to FCA criteria. This group would struggle to meet an increase in rent or bills.

• Hard-Up Homemakers: Owning an asset does not always go hand-in-hand with cash flow. Almost a third (33%) of middled-aged mortgage holders have stopped saving or investing due to financial pressures. This rises to 37% for those with at least one young child.

• Solo Sufferers: In a world built for two, over a quarter (26%) of this group struggle with poor mental health. 12% experience increased financial pressure due to a recent relationship breakdown and 32% are feeling heavily impacted by mounting bills.

What can businesses do?

Richard Bassett, VP of Digital & Analytics at NICE, says, “Offering personalised, empathetic customer service in today’s digital world can be challenging. This becomes even more complex when needing to support vulnerable customers. As our report highlights, the signs of vulnerability are not always easy to detect, especially when consumers aren’t aware of their own vulnerability or willing to talk about it. Yet many businesses still rely on agents to not only accurately identify vulnerability during every conversation, but also respond to their varying needs. With regulators tightening rules around the fair treatment of vulnerable customers, businesses risk large fines if they don’t get this right.

“Promisingly, AI delivers a solution. Harnessing the power of your customer service data, AI can help to accurately detect signs of vulnerability during every interaction – be that stress, financial woes, or even a breakup – and offer real-time guidance for agents to ensure they can provide an exceptional experience every time.”