In recent months, some of the main high street banks have brought in measures to help specific groups of vulnerable customers. HSBC has taken steps towards becoming a ‘dementia-friendly’ bank, and Lloyds Banking Group has put services in place to support deaf customers.
It is neither easy nor pleasant to consider what it might be like to be vulnerable, if you’ve yet to experience it. Medical conditions, along with the process of ageing, make some element of vulnerability inevitable and naturally shape the way we live our lives. Our ability to understand these vulnerabilities well enough to manage them effectively is the key to limiting their overall impact on our well-being, and personal finances are an important part of that.
In July 2017, Lloyds began offering extra practical support to customers with cancer in the form of a customer service team that has been trained by cancer charity Macmillan, and is empowered with the ability to grant payment holidays, waive fees or charges, and provide advice on budgeting.
The moves made by some of the main retail banks towards a more supportive environment for vulnerable customers suggest that approaches to the provision of financial services are shifting away from blanket, mass marketing.
Assurance needed
Elsewhere in the finance industry, travel insurers have recently come under pressure from the FCA for not doing enough to support cancer patients. According to Mintel research on the UK travel insurance market, 29% of British consumers would not always declare a pre-existing medical condition when buying travel insurance, and 10% have had trouble getting cover for a pre-existing condition in the past three years. In addition to this, around one in five consumers say they would not inform their travel insurer if they developed a medical condition during the term of a 12-month travel insurance policy. This is concerning, as it suggests that vulnerable customers are struggling to find the cover they need. They may also feel pressure not to declare their pre-existing conditions to avoid high premiums, thereby risking that their cover will be invalidated.
Price prohibiting prevention
There is no doubt that financial services providers must do more to support vulnerable customers, and the recent spate of new investments by some of the main retail banks will begin to make a difference. However, more could be done to help people prepare for the future and ensure they are better prepared to meet unexpected financial strains. The challenge with health and protection products is that many people see them as optional extras that come at too high price to be worth considering. It would require a significant cultural shift and improvements in affordability for people to start pursuing financial protection for health concerns.
Patrick Ross is Senior Financial Services Analyst at Mintel, writing reports and analyst insights for Mintel’s UK Financial Services team. Prior to joining Mintel in 2015, Patrick worked in both the payments and insurance industries, as well as working as an analyst for a market research company.
