Rethinking Vulnerability: Customer Needs on a Spectrum

In our Vulnerability series, we’ll examine what vulnerability is, the challenges of identifying it in digital journeys and the implications for businesses and consumers. In this edition, we’ll explore vulnerability as a spectrum, its characteristics, and why it's important for firms to take customer vulnerability seriously, both to improve their customers' experience but also to stay ahead of UK regulation. Let’s understand vulnerability on a spectrum.

Understanding the Spectrum of Vulnerability

Vulnerability is not a fixed state; instead, it exists on a spectrum, and is influenced by various factors. Broadly, we can identify four core drivers of vulnerability: Health, Life Events, Resilience, and Capability, as described by the Financial Conduct Authority. These categories, as you’ll see below, encompass much of our daily experiences:

• Health: refers to conditions that impact a person's ability to perform daily tasks including physical and mental impairments.

• Life Events: covers a range of experiences from bereavement to domestic abuse and retirement.

• Resilience: refers to financial security and the ability to recover from hardships.

• Capability: refers to levels of education, financial literacy and digital skills. 

Given this understanding, the design and optimisation of digital experiences must evolve to support a diverse range of users. Traditional approaches that segment customers by age or profession are inadequate, as an individual can move in and out of vulnerability at any point, for example, because of a difficult life event, which may be temporary. 

The combination of these factors presents challenges for researchers, user experience designers, and business leaders. We refer to vulnerability as a spectrum to emphasise that any consumer may simultaneously face multiple challenges, making detection and support more complex.

Drivers and Characteristics of Vulnerability

To effectively support consumers facing vulnerability, we must adopt a more adaptable understanding of its characteristics. Here’s a closer look at the key drivers of vulnerability:

Health

The Chartered Trading Standards Institute (2021) found that health issues, particularly mental health conditions, can lead consumers to make poorer financial decisions, leaving them vulnerable to unfavorable deals and services. This can manifest in various ways, such as being offered less suitable terms, purchasing inappropriate products, or struggling to keep up with payments. Establishing touchpoints where users can disclose health-related concerns, such as providing payment holidays for those facing medical challenges, could greatly support vulnerable consumers.

Life Events

How can companies design online user journeys that accommodate unexpected life events? Are products flexible enough to allow for changes in circumstances, such as divorce or bereavement? When sudden life changes occur, consumers may behave differently, but online journeys often lack straightforward options for disclosing such information. Creating pathways for consumers to share significant life events could lead to better support and tailored solutions.

Resilience

Consumers exhibiting signs of poor resilience such as difficulties repaying debts or inconsistent income, represent a growing segment of vulnerability in the UK. With 6 in 10 organisations not having a vulnerable customer policy in place, companies must consider how digital experiences can better capture granular data points that may indicate a consumer's changing circumstances. For instance, trends in the use of payment plans or assistance programmes can signal low resilience among consumers and highlight the need for more robust support mechanisms.

Capability

Education and understanding are crucial in shaping consumer vulnerability. There is a wide spectrum of challenges, from basic literacy and numeracy to digital and financial literacy. Do companies provide accessible and understandable content? Is critical information obscured by jargon? It is vital to consider the varying levels of capability among users, as some may struggle with basic financial skills while others may face learning disabilities. While progress has been made in general accessibility, there is still a significant gap in addressing the specific needs of vulnerable users.

What’s Next for Addressing Vulnerability?

Given the range of potential challenges across the vulnerability spectrum, are organisations equipped to address these needs without compromising key business objectives? It’s essential to reevaluate customer journey mapping, user personas, and behavioural analytics, but most importantly, understanding those customers' needs. Current practices often focus on driving product outcomes with exceptional user experiences, yet insufficient attention has been given to uniting disciplines to effectively cater to vulnerable users.

We’ll be continuing our Vulnerability series with a closer look at the challenges vulnerable consumers face within the energy sector and practical strategies businesses can implement to offer better support, stay tuned.