The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

The Financial Conduct Authority (FCA) has once again put this issue under the spotlight with its recent review, identifying both commendable progress and critical gaps that firms must address.

For businesses looking to strengthen their approach to vulnerability, this report offers invaluable insights on how the FCA views market adherence on their expectations. Here’s what you need to know — and why it matters to your firm.

Where firms are excelling and where they’re falling short

The FCA has acknowledged some improvements in the way financial services firms support vulnerable customers, but the work is far from complete.

Encouraging progress: some key positives

• A shift in mindset: The introduction of the Consumer Duty framework has driven a more proactive and customer-first approach across the industry.
• Personalised support: Some firms now offer specialised teams and tailored repayment plans to better assist vulnerable customers.
• Innovative use of technology: Artificial Intelligence (AI) driven speech analytics and customer behaviour tracking helps firms effectively identify vulnerability. However, there remain critical areas for improvement, including:
• Product design still lags behind: Many financial products remain too rigid, failing to consider the specific needs of vulnerable individuals.
• Gaps in outcome monitoring: While firms collect data, few have robust systems in place to ensure vulnerable customers achieve fair outcomes. There appears to be a lack of clarity around what good outcomes looks like.
• Ineffective escalation: Firms were not always able to demonstrate how they use data to identify areas for improvement and establish clear and effective escalation processes where poor outcomes were identified.
• Training needs strengthening: Many product and design teams lack the capability to build inclusivity and vulnerability considerations into product development.
• Disengaged leadership: Lack of engagement challenge and direction from senior leaders.
• Data silos create friction: Customers often have to repeatedly disclose their vulnerabilities, as firms fail to maintain centralised records.

What leading firms are doing right

The FCA’s review highlighted specific good practices that all firms should consider adopting:

• Proactive identification: Leading firms encourage customers to disclose their needs early and maintain centralised records to ensure seamless support across departments.
• AI-driven insights: Advanced technology is being used to detect early signs of vulnerability, helping firms intervene before financial distress escalates.
• Clear and accessible communication: Simplified language, alternative communication channels and tailored support materials all help vulnerable customers engage with financial services in a way that is practical for them.

What this means for your business

The FCA’s expectations are clear, firms must take responsibility for understanding, supporting and monitoring vulnerable customers. Here’s how firms can stay ahead:

• Prioritise training: Equip your teams with the right knowledge and tools to identify and assist vulnerable customers.
• Review your products and services: Ensure they are flexible and designed with diverse customer needs in mind.
• Leverage data and technology: Use AI, behavioural analytics and centralised data systems to enhance customer support.
• Monitor and adapt: Continuously assess whether your initiatives are delivering fair outcomes — and be prepared to make changes.
• Ensure senior leadership engagement: Senior leadership stakeholders should be actively involved in monitoring vulnerable customer outcomes, with a strong emphasis on understanding both the benefits and risks of appropriate treatment. Their engagement is critical in driving effective strategies that prioritise fair treatment and compliance while mitigating potential pitfalls.

Beyond regulatory compliance, there’s a strong business case for getting this right. Firms which genuinely support vulnerable customers will not only build a stronger reputation but also foster greater customer loyalty and resilience in an increasingly competitive market.

Connect with our expert consultancy partners at FTI Consulting to discuss how these insights can be applied to your business, and how to strengthen your approach to vulnerability, Consumer Duty, and customer outcomes.