UK firms lack records of vulnerable customer support

IP Integration has published research suggesting that most UK retail and financial services businesses lack automated, searchable records of interactions with vulnerable customers. The study found a gap between firms' stated preparedness for regulatory scrutiny and the systems they use to evidence customer support.

Among 400 compliance, operations and customer operations leaders surveyed, 98% said they were prepared for increasing scrutiny from the Financial Conduct Authority over how vulnerable customers are treated. Yet only 25% said those interactions were logged automatically and could be searched.

Among the rest, 27% said records were logged manually by staff, 25% said they were spread across multiple systems, and 23% said they were captured inconsistently. The findings suggest many firms would struggle to quickly produce a clear record showing how an individual vulnerable customer was handled.

Nearly two-thirds, or 63%, said they would need three working days or more to retrieve a single interaction record for a regulator. Just 4% said they could do so on the same day.

Evidence gap

The research points to a divide between board-level attention and day-to-day record-keeping. It found that 94% of respondents had discussed readiness for scrutiny of vulnerable customer treatment at board level in the previous six months, while 99% had tested their processes against a mock regulatory audit in the past year.

Confidence also varied by function. Compliance leaders were more cautious than operations leaders: 90% said they were confident they could quickly provide evidence of a vulnerable customer interaction, compared with 99% of operations leaders.

A third of respondents said frontline staff rely mainly on training and judgement to identify vulnerable customers during live conversations. This leaves businesses dependent on individual experience at the point of contact, rather than on consistent prompts or automated processes built into customer service systems.

The issue has become more important as the FCA's Consumer Duty framework places greater emphasis on demonstrating good outcomes for vulnerable customers. The research also highlighted the added complexity of buy now, pay later products, where firms may need to connect records across checkout, affordability checks, customer service and complaints.

Almost every business surveyed, 99.5%, said it offers buy now, pay later options. Ahead of the latest rules, 94% said they could quickly evidence a buy now, pay later affordability or vulnerability decision. But the study suggests many still face practical challenges in linking records across the full customer journey.

Frontline systems

Annabelle Goymer, Head of Customer Success at IP Integration, said: "Anyone can become a vulnerable customer. A bereavement, a health problem or a sudden drop in income can change someone's circumstances overnight, and FCA research shows only four in 10 people tell their provider when it happens. That means businesses need to be well placed to recognise the signs and respond appropriately, rather than wait for customers to identify themselves as vulnerable.

"The intent is clearly there, and businesses have invested in the policies and governance to back it up. The opportunity now is to make good practice easier on the frontline. That means giving workers prompts within the systems they already use, so spotting vulnerability doesn't rest on memory or experience alone. It means capturing what happened automatically as part of the conversation, rather than relying on notes written up afterwards.

"But capturing interactions is only part of it. Regulators are looking for evidence of good outcomes: that the customer was understood, supported appropriately and left better off for the interaction. Get those foundations right and the evidence is there when the regulator asks. More importantly, the customer gets the right support first time."

The survey was conducted by Cavell and covered leaders at UK retail and financial services organisations. The findings indicate that while firms have invested in governance and audit preparation, many still rely on fragmented or manual systems to document how vulnerable customers are identified and supported.