Sopra Steria: The Value of Banks for Vulnerable Citizens

In times of hardship like today’s protracted cost-of-living crisis, the role of banks in supporting vulnerable citizens by prioritising their financial wellbeing is perhaps not spoken about enough.

Here, FinTech Magazine and Sopra Steria look at the important role banks can play in supporting underserved, vulnerable individuals and communities, and how technology can help enable banks to achieve this.

“Prioritising the financial wellbeing of those in a vulnerable situation should be of paramount importance for banks, aligning with both their social responsibility and the industry's commitment to inclusivity,” says Craig Wilson, Managing Director of the Private Sector for Sopra Steria UK.

Of course, while many banks appreciate the importance of social responsibility and inclusion, for some banks it is perhaps not a well-embedded part of daily practice. 

“There are different ways that banks can fulfil their ethical duty and contribute to economic stability,” adds Wilson. “The UK’s FCA expects banks to signpost customers to third party providers of support, for all vulnerabilities (not only financial). 

“The vast majority of UK citizens have a bank account, therefore Banks should be considered as a gateway service which goes beyond signposting to third party providers and preventing financial difficulty. 

“They can offer more tailored services and support to help individuals better manage their personal finances and mitigate against the ongoing cost-of-living crisis. Financial resilience can, in turn, become an enabler to reducing other forms of vulnerability.” 

The role of technology in financial wellbeing

Of course, significant strides in technology can make access to typically hard-to-reach individuals far easier, but are banks using the latest innovations enough to reach underserved customer bases? 

Wilson says: “Our research found that around half of banks (48%) are not completely confident in their ability to use customer data to identify vulnerabilities, and in turn support their customers effectively. 

“One solution is to find a trusted partner who can help them deploy the right technology to analyse their customer data sets, and generate personalised recommendations to help identify and support vulnerable individuals more effectively.

“In the ever-evolving landscape of the financial sector, the failure to fully leverage customer data represents a missed opportunity for banks to enhance their ability to provide tailored support to those who need it.”

For those that do fail, the question stands: How can they address it?

The key, for Wilson, is to adopt “a proactive approach – involving comprehensive training, robust data governance, and ethical frameworks. This will ensure that banks not only harness the power of data but also uphold the trust and wellbeing of their customers."

Leveraging leading solutions that support vulnerable citizens

Having the right tools and correctly using them is key for banks in their bid to drive a proactive approach, but where are we seeing the best innovations today? 

“Innovations in this area come from inclusive design,” says Wilson, “collaborating with people who have lived experience of a vulnerability to understand the barriers to good outcomes and create a solution that really works. 

“A well-known example is gambling blockers. Another application of the spending controls that underpin this solution is a ‘carer card’. 

“The same functionality could also be deployed to help people who are susceptible to impulsive online spending due to mental health issues or neurodiversity or to protect people at risk of telephone scams. 

“The point is that involving customers in defining your change backlog could maximise the potential for one solution to have positive impacts for vulnerable citizens.”

For Wilson, the banking industry has only scratched the surface of potential usages of payments controls, and how they can empower vulnerable customers. 

Supporting vulnerable customers: The challenges

And while the scope to support vulnerable bankers and drive financial wellbeing is vast, there remain challenges in banks’ ability to quickly and accurately identify those in most need of support. 

As Wilson explains: “The biggest challenge for banks is to be able to quickly and accurately identify the people most in need of support. Vulnerable customers often don’t come forward for help, either due to embarrassment or a lack of understanding about the support available. 

“With banks already saying they aren’t confident in their ability to use customer data effectively, integrating advanced analytics and AI to detect patterns of vulnerability is critical.  

“By better understanding their customers' capabilities, channel preferences and financial behaviours, and predicting potential vulnerabilities, banks can offer timely assistance and tailored solutions to help improve the lives of their most vulnerable customers.” 

Of course, banks don’t need to go it alone either, with plenty of scope for collaboration between government agencies and non-profit organisations available to help banks overcome the challenges they face. 

In fact, Wilson says collaboration between all three parties is “vital to create a comprehensive support system for vulnerable citizens, whether that be financial or any other type of vulnerability. 

“By embracing a holistic perspective, that looks at the whole system, all three can work to alleviate vulnerabilities through inclusive design, data sharing and better sign-posting to support.

"We know there’s a huge amount of support out there, but for the most part, it either isn’t known about or isn’t directed towards. Banks hold the data and relationships to be able to change this.”

Ensuring support for vulnerable citizens is sustainable

Once banks have the right safeguards and processes in place to support vulnerable people, the mission thenceforth is to maintain it. 

“First,” says Wilson, “they should ensure those working in frontline roles are equipped to identify, support and record customer vulnerabilities, embedding this commitment into corporate culture and ensuring frontline employees are bought into how this embodies the organisation’s purpose and values.

“Regular training for employees on identifying and assisting vulnerable customers is also essential, with only half (52%) of customer service leaders in the financial services industry saying they have complete confidence their frontline workers have the skills and tools needed to be able to provide tailored support to customers."

“Investing in technology, like AI and data analytics, can hugely help to scale support for vulnerable customers. 

“By harnessing advanced analytics, banks and financial service providers can gain deeper insights into the unique challenges faced by vulnerable populations, enabling providers to tailor solutions that address the specific needs of consumers – by proactively identifying and assisting people to reduce the likelihood and severity of harm.

“An often overlooked fact is that support for vulnerable customers will only be sustainable long-term if it’s easier than the alternatives, for your customers. 

“Disclosing support needs and accessing appropriate support needs to be easier than struggling in silence. It needs to offer a fair value exchange – if you are asking your customers to share their most sensitive information, you need to offer compelling, relevant support in return.”

How to enhance support for vulnerable citizens

For banks looking to enhance their efforts in supporting vulnerable citizens today, Wilson recommends “enabling empathic conversations on the front line, and ensuring customer teams are equipped with the knowledge and skills they need to be able to provide the best, most appropriate support. 

“That being said, it’s critical banks also look after their own and safeguard their teams from absorbing all the frustrations customers can present. 

“To do this, the front line must be empowered through effective use of data and skills to tailor services to customer's needs – within a culture where vulnerable customers are valued customers, not a niche segment 'dealt with' by a specialist team.

“Banks, and all financial institutions with vulnerable individuals, need to make a cultural change to embed customer inclusion into their everyday. 

“The conversation needs to change from one of parent-child approaches to language that empowers colleagues and customers to mutually understand what support is effective and truly educates customers.  

“Perhaps the most important piece of advice I could offer is to remember that anyone can be vulnerable. What this means is that financial services organisations need to focus on just designing good customer experiences. 

“Using inclusive design will overcome barriers to good outcomes for those with specific support needs but will also increase ease for everyone.”

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