MorganAsh launches new calculator to highlight gaps in identifying vulnerable customers

Customer vulnerability specialists MorganAsh have launched a vulnerable customer calculator to enable financial services firms to better understand the likely scale of vulnerability across their customer base.

The new tool responds to a persistent challenge across the industry where firms are only identifying a fraction of their vulnerable customers. While the FCA’s Financial Lives survey suggests that firms should expect that around half of their customers are vulnerable, many firms are only identifying vulnerable customers in single-figure percentages. 

Without clear visibility on how many vulnerable customers they have, MorganAsh argues that firms often underestimate both the scale of the issue and the resources required to address it. By basing their planning and budgets on the assumption of a small proportion of vulnerable customers, firms underinvest in the processes and support needed to assist those customers. 

MorganAsh’s calculator aims to bridge these gaps by using established research into common characteristics to give firms a broad indicator of how vulnerability may present across a customer base. By giving a more realistic view of potential vulnerability, firms are then able to make more informed decisions around resourcing. 

Developed in-house by MorganAsh, firms use the calculator by moving the slider in line with the number of customers the firm has. It covers around 20 of the most common vulnerabilities and provides an indication of how customers would fit into each cohort. For example, a firm with 1,000 customers is likely to have around 440 customers that will not understand detailed financial information. 

The output is not intended to provide a definitive measurement, but a broad statistical insight designed to help firms conceptualise the scale of vulnerability across their customer base. 

The new calculator comes as the FCA calls on financial services firms to be proactive in their approach to identifying customer vulnerability, rather than relying solely on consumers to proactively disclose issues to firms.

Andrew Gething, managing director of MorganAsh, said: “The FCA has repeatedly identified that firms underestimate how many of their customers are vulnerable, often by a significant margin. The reality is that customer vulnerability is far more prevalent than many firms consider or expect. The aim of our calculator is not to provide an exhaustive scientific result, but a statistical indicator of how many customers are vulnerable and in what ways. 

“Insight is only the first step. Once firms have some indication of the scale of vulnerability, the focus must shift to managing customer vulnerability and putting the necessary processes in place to identify, monitor, support and report on vulnerability in a consistent and objective way. Recent guidance from the CII has set out a clear blueprint of what good looks like when it comes to IT systems, classification and data infrastructure, helping firms embed structured and fully auditable processes.” 

MorganAsh is a specialist in Consumer Duty and customer vulnerability. The firm launched its multi-award-winning MorganAsh Resilience System (MARS) to help firms understand and monitor vulnerable customers and deliver good outcomes – as required by Consumer Duty. It is in use across financial services and the utilities sector, enabling businesses to adopt a consistent approach to identifying vulnerable characteristics and generate an objective Resilience Rating – much like a credit score. 

The MARS platform meets the system requirements set out in the new CII guidance, providing financial services firms with a proven tool that can be used as a standalone system or integrated into other systems via an API (application programming interface).

To try out the new vulnerable customer calculator, please click here.