The Financial Conduct Authority (FCA) has recently updated its guidance to ensure that vulnerable customers are treated fairly across all financial services. These updates place a strong emphasis on the need for firms to identify, support, and protect vulnerable individuals, especially during the complaint-handling process.
Who Are Vulnerable Customers?
A vulnerable customer is someone who, due to their personal circumstances, may be more likely to experience harm when dealing with financial services. The FCA identifies four primary drivers of vulnerability:
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Health: Physical or mental health conditions that impact daily functioning.
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Life Events: Significant changes such as bereavement, redundancy, or relationship breakdown.
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Resilience: Limited ability to cope with financial or emotional shocks.
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Capability: Low financial literacy or confidence in managing money.
By recognising these factors, firms can tailor their services and support to meet the specific needs of vulnerable individuals.
FCA’s Regulatory Expectations: FG21/1 Guidance
In February 2021, the FCA published its finalised guidance, FG21/1: Guidance for Firms on the Fair Treatment of Vulnerable Customers. This sets out clear expectations for financial services firms, including the need to:
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Understand vulnerability in your customer base: Identify the types and scale of vulnerabilities within your target market.
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Equip staff with the right skills: Train employees to recognise and respond to vulnerability effectively.
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Take meaningful action: Implement policies, systems, and services that support fair outcomes for vulnerable customers.
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Monitor and improve: Continuously evaluate the effectiveness of your approach and make necessary improvements.
The FCA continues to review how well firms are supporting vulnerable customers, identifying both good practices and areas where improvement is needed.
Why Prioritising Vulnerability Is Crucial for Financial Services
Addressing vulnerability is not just a regulatory requirement—it’s also a strategic and ethical imperative. Ignoring the needs of vulnerable customers can lead to:
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Regulatory sanctions
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Reputational damage
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Loss of customer trust
Conversely, by embedding vulnerability considerations into their culture and compliance strategies, firms can:
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Improve customer outcomes
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Strengthen customer loyalty
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Reduce complaints and operational costs
How Forseti Helps You Meet FCA Vulnerability Standards
Forseti provides smart solutions that help financial services firms manage complaints more effectively—ensuring vulnerable customers receive the support they need.
With Forseti, you can:
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Identify vulnerable customers early: Use data analytics to flag potential vulnerability signals at any stage of the customer journey.
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Automate complaint handling: Streamline workflows to ensure timely and fair resolutions.
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Monitor compliance effortlessly: Track how vulnerable customers are treated and generate reports to demonstrate FCA compliance.
Forseti’s technology empowers firms to meet regulatory expectations and deliver compassionate, compliant service to those who need it most.
Final Thoughts
The FCA’s updated guidance reinforces a clear message: treating vulnerable customers fairly must be a core part of your business strategy. By taking proactive steps to identify vulnerability, train staff, and enhance complaint handling processes, firms can ensure fairer outcomes for all—and foster trust in the process.
Firms that capture complaints properly and dig into root causes will gain not only better compliance but also greater customer satisfaction, especially among vulnerable groups.
Want to see Forseti in action?
Book a demo today to discover how our powerful complaints management platform can help you better support your vulnerable customers.