Your bank might think you're vulnerable – and that should be OK. 🏦
Your bank might think you're vulnerable – and that should be OK. 🏦
Financial sector businesses can use strategic design to better serve everyone's needs
Welcome to The Navigator 🧭 - a newsletter about people, technology and design for business leaders who want to make meaningful change. I’m Sarah Ronald, and I write this newsletter with the Nile team. If this email was forwarded to you, you can subscribe here to receive it straight to your inbox.
Hello! 👋
If someone said they viewed you as vulnerable, how would you feel? Confused? Angry? Worried? A bit of all three?
It’s not something most of us want to hear, particularly from someone in a position of power.
However, the FCA’s Consumer Duty regulations specifically call out the need for institutions like banks, insurers and pension providers to identify and protect vulnerable customers.
Can better-designed services play a role in making things better for consumers, and easier for financial sector businesses? (Spoiler: yes! Read on to find out how.)
We also held a fantastic event this week on the startup ecosystem in Scotland, bringing together two expert panels to discuss talent and funding. Check out what we learned in the Nile News section.
Wishing you all the best as you navigate your week,
–
Transparent by design
Clearer paths through complex services help financial sector businesses protect more than just the most vulnerable customers
Imagine a world where your financial well-being is everyone's priority, and where the safeguards are strongest for those who need them most.
This isn't just an ideal; it's the cornerstone of the Financial Conduct Authority's (FCA) Consumer Duty standards. These regulations are not about singling out vulnerability as a weakness, but recognising it as something many people experience, and an area for heightened support and protection.
That means defining what vulnerability looks like, and, for many institutions, identifying who those customers are.
The FCA works on the principle that adults are, on the whole, responsible for their own financial choices. So when you take out a £200k bank loan to build a luxury pool and spa in your back garden, it’s firmly on you to pay it back.
But the regulator now also requires that institutions like banks and insurers help customers make informed decisions in order to avoid “causing foreseeable harm”.
Vulnerable? Me?!
Who are these vulnerable people then? Surely not you or me? You might be surprised.
The FCA says vulnerability can be “temporary, sporadic or permanent in nature”. It could be down to a disability or simply getting older, but vulnerability might also be triggered by changes in health or sudden events such as bereavement.
Most of us will, at some point, find ourselves in a situation where our capacity to cope with unanticipated financial challenges is compromised, or where we have a reduced ability to understand financial products or services.
In fact, the FCA’s own Financial Lives survey estimated that more than half of the UK population has one or more characteristics that might put them in this group. This includes nearly a quarter of UK adults who are classed as having ‘low financial resilience’ – they’re either already in financial distress, or are perilously close to it.
How can we identify vulnerable customers?
Tracking down individuals at risk within a financial institution’s customer base isn’t straightforward, and approaching them is equally fraught.
A business can create an environment where customers are encouraged to voluntarily disclose their situation. Clear, compassionate communication that assures confidentiality, and outlines the benefits of disclosure, such as tailored support, can create the conditions for this kind of self-disclosure.
Potential vulnerabilities can also be detected more subtly through feedback channels like carefully-worded surveys. In both cases, though, those ‘giving themselves away’ may be a self-selecting group of customers in more desperate situations.
Employees can be trained to proactively spot the signs of vulnerability when they interact with customers – not just through talking to them, but in changes in financial behaviours. With the right systems in place, a staff member can flag patterns that might suggest stress, confusion or financial difficulty.
Those patterns can also be detected directly using analytics tools and predictive models, identifying potential vulnerability through any unusual account activity or characteristics already known to the business.
But if most people are vulnerable…
Step back from the problem, though, and a bigger question comes into focus: should we be seeking to single out vulnerable people in the first place?
The Consumer Duty stipulates that “firms should be open and honest, avoid causing foreseeable harm, and support you to pursue your financial goals”.
It precisely defines a vulnerable person as "someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”.
Rather than zooming in on who is or isn’t vulnerable, shouldn’t we foreground the second part of that definition? Are financial services being delivered in an “open and honest” way, and are providers “acting with appropriate levels of care”?
We’ve already seen that the majority of people will find themselves in the ‘vulnerable’ group at some point in their lives, and the FCA is right to expect firms to identify and tailor financial services to people who might be at increased risk.
But it seems counterintuitive to spend time and resources tracking down those customers, employing specialist staff, having awkward conversations, and creating multiple tailored user journeys to deal with them, when they potentially make up such a significant slice of their customer base.
Designing better services from the start
Instead, why not focus on delivering products, services and content that take the needs of those individuals into account from the start?
This week, the FCA shared examples of good practice they’ve already started seing in making user journeys more transparent. These included:
Businesses adding ‘in the moment’ prompts and push notifications during the customer journey to let customers know about additional fees or charges.
An insurance firm that has started highlighting policy exclusions on its website before customers start their application, so it’s clear up front.
A bank which now clearly lists what’s included with its current account product, and an equally prominent list of what isn’t.
However, they also make clear there is still much to do – and that they won’t be backing down from enforcing the Consumer Duty.
We’ve often spoken about the value of human-centred design, services that are designed strategically from the outset to deliver for businesses, staff and customers. It’s now firmly not just a ‘nice-to-have’: it’s vital to meeting regulatory requirements.
This can be hard to get right. We’re already helping our clients – including some major household names – better understand their responsibilities, and design services that do right by their customers.
Of course, there will always be a place for monitoring customer behaviour and ensuring those who are particularly vulnerable get the tailored support they need.
But making this the default isn’t a sustainable or cost-effective approach. Institutions that want to achieve lower costs, optimised processes and – crucially – higher customer trust and satisfaction, must invest in thoughtful, strategic design now and make their services better for everyone.
Nile News
From Startups to Standouts
We had a brilliant turn-out at our event, ‘From Startups to Standouts’, this week, held in partnership with Scottish Financial Enterprise and Barclays Eagle Labs.
More than 60 professionals joined us at Eagle Labs’ funky converted grain mill in Glasgow to discuss what it takes to build and develop Scottish startups into global leaders.
Attracting talent
In the first of two panel sessions, Joy Lewis of AAI EmployAbility – who pioneered the ‘Adopt an Intern’ programme — Rich Wilson of talent platform Gigged.AI, and Kirsty Bathgate from Gearing for Growth shared their insights around finding, developing and retaining talent within startup environments.
🪢 The panel highlighted the importance of creating a clear culture from the outset, being really deliberate about creating a mission and values that you can actually live by – not just something to pin up on the wall.
💪 They also discussed how to empower employees via open communication and transparency, which not only attracts new talent but also helps retain existing staff, and feeds into a positive culture.
💸 The point was raised that money isn’t everything – so long as your team is paid enough, good people can be incentivised to join and stay in other ways. Being a small, innovative, fast-growing business can be an incentive in itself; people who’ve worked in big, slow-moving corporate roles might value the pace and excitement of a startup.
📝 And, while startups might be tempted to shun ‘big corporate’ practices, it was noted that you shouldn’t throw the baby out with the bathwater – some practices, like properly documenting policies, can give employees clarity and save headaches down the line.
Building a solid foundation for growth
Throughout the discussion, the importance of inclusivity and diversity emerged as a recurring theme. Startups should ensure diverse representation in hiring processes, training interview panels in unconscious bias, and focusing on skills rather than how someone looks or ‘cultural fit’.
Additionally, the panelists discussed bringing in senior people on a fractional basis, how a well-selected board can add depth and value, and constantly reminding teams about your startup's core mission during periods of rapid growth and change.
The funding challenge
Our second panel brought together Andrew Munro of EY, Dr Dave Hughes –founder of Novosound, which is commercialising ultrasound – Dr Poonam Malik, Head of Investment at Strathclyde University, and eco investors Greenbackers’ founder Robert Hokin to talk about the funding challenge for startups.
💸 The panel discussed the difficult leap startups face between securing their initial £500k funding to financing the so-called ‘valley of death’ growth phase before reaching profitability.
👩💼 They also highlighted gender disparity in our startup culture – startups led by women still receive less than 3% of overall VC funding.
🌍 And they took a global perspective, considering the mindset shift needed in the Scottish startup scene to enable access to global markets crucial for venture capital success. This included leaving our own comfort zones to take startup pitches to where the investors are.
The panel also debated the way we value startups in Scotland, and how we can ensure that valuations are more in line with those of companies based in London and the US – so too much equity isn’t given away too early.
We finished on a really positive note, with optimism around how Scotland's startup ecosystem is evolving, with more government interest in entrepreneurship, increasing availability of funding and support for diverse founders, and a global diaspora of Scots prepared to help make a success of new businesses.
Thanks to our panelists and to everyone who attended for such a lively session, and to our partners at SFE and Barclays for helping make it happen.
Stay tuned for more events in the near future and make sure you follow Nile on LinkedIn for what’s coming next. Speaking of which…
Edinburgh UX Meetup
We’re hosting the next Edinburgh UX Meetup at Nile’s offices on 29 February. The theme this time is how we bring futures thinking into the designer's toolkit.
Nilers speaking at the event will include our Design Director, Neil Collman, plus designers Bridgette Bell, Katherine Snow and Tiernan Haugh. The event is already ‘sold out’ but there is a wait list available - and, of course, we’ll share highlights in the next edition of The Navigator.
That’s all for this issue - if you find The Navigator valuable, please spread the word by sharing it with your friends and colleagues:
About Nile
Nile is a Strategic Design team that helps deliver human-centred change in highly regulated industries. Our methods engage employees and customers with new technology and ways of working. Our outcomes help you save money and improve your business performance.
If you think we can help your teams, reply directly to this email (they come straight to my inbox), or reach out to someone specific via our website.
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