As inflation and interest rates rise steeply, interactions with vulnerable customers will pose new challenges. It’s vital to be prepared.
Over the coming months, rapid cost-of-living increases are on course to affect consumers all round the world.
The impact will be heaviest amongst the least well-off – but it will even affect many middle-class consumers with above-average incomes and personal wealth. Especially those with high levels of financial commitments, including mortgages, the costs of growing families - and people with frailties and disabilities, requiring high levels of energy usage.
As a result, every business dealing directly with consumers should prepare now for an increase in the number of interactions they have with customers showing signs of vulnerability - especially relating to financial resilience and their ability to pay.
Many of these interactions will be difficult, even distressing for the customers and also the employees involved. It’s essential to take steps now to prepare businesses and especially customer-facing staff to deal with these situations in a way that’s sympathetic, fair and - for regulated firms – also fully compliant.
The effects of the cost-of-living crisis will be seen across businesses in all sectors that serve consumers directly – including utilities, healthcare and groceries, to name just three.
But the sector that will perhaps face the greatest challenge of all is the one concerned most with money: financial services.
Financial services and the cost-of-living crisis
Every branch of the financial services industry is likely to be impacted. The most obvious problems are already being seen by mortgage lenders and other providers of secured and unsecured credit.
In the UK, the Bank of England base rate reached 2.25% in September 2022, its highest level since 2008 and over 20 times greater than the 0.10% rate of just 12 months previously. What’s more, the market is expecting further significant increases over coming months.
The effects on mortgage customers, especially those reaching the end of fixed rate deals, are already widely documented. But the pain will also be felt by all consumers with a reliance on credit – including personal loans and credit cards.
Not only that, but the overall pressure on household budgets will affect consumers facing challenges in paying insurance premiums and managing bank balances in the face of significant cost increases.
And as more and more consumers find themselves struggling to cope, the impact is likely to be seen acutely in the interactions these consumers have with front-line staff in the financial services companies they deal with.
Additional concern for vulnerable customers
In recent years, there’s been a growing emphasis on the moral and regulatory need for financial services firms to treat vulnerable customers with care.
In fact, this is a mission that Voyc has been keen to support, with resources including our highly popular Vulnerable Customers white paper.
In addition, regulatory bodies around the world have strengthened the focus on customer vulnerability through new rules and requirements.
In the UK, this has most recently been seen in the challenging new compliance standards set out in the FCA’s Consumer Duty, published in July 2022. The new rules make extensive reference to the particular needs of vulnerable customers and the message is clear:
Firms will be required by the FCA to demonstrate that they have assessed the needs of the customers in their target market, including those customers with vulnerabilities. And they will be expected to show that they have taken appropriate action to deliver good outcomes for those customers in four key areas:
Products and services
Price and value
You can read more about the Consumer Duty and the requirements for regulated firms in this recent article from Voyc.
All in all, the onset of the cost-of-living crisis so soon after these regulatory developments could now create a “perfect storm” in which the ability of regulated firms to provide required levels of customer care will be heavily tested.
Preparing and protecting front-line employees
It’s important for firms to focus on the emotions and behaviours that vulnerable customers might reveal in their one-to-one communications – on the phone, online and face-to-face.
Probably the most obvious indicator of vulnerability is acute emotional distress. This is also the most important for immediate escalation and attention. Sadly, it’s by no means unheard of for contact centre staff to encounter customers talking about self-harm and even suicide.
The potential impact on team members of dealing with customers suffering from feelings like this should not be underestimated.
Firms should carefully prepare all customer-facing staff, especially those handling one-to-one customer conversations on a regular basis, to deal with these difficult situations and respond appropriately.
And staff exposed to situations like this also need ready access to support and assistance in the event of a challenging or even abusive interaction – a way of sharing the experience to help manage the potential personal impact. This recent Voyc article provides more guidance in this area. Although it focuses on call centres (where many of the most difficult contacts take place) it applies equally to all customer conversations, especially using the phone.
How Voyc can help manage the challenge
The Voyc solution can monitor 100% of your customer phone conversations – from the largest contact centres to customer-facing teams of just a few professional staff.
Every customer call is evaluated and the built-in analytics capability allows users to build reports based on a vast range of variables as required – including the sentiment of customers and staff members and the outcomes of calls.
This reporting function could be invaluable to firms required, by regulators and governing bodies, to demonstrate their ability to manage interactions and outcomes for customers of all types.
What’s more, the Voyc software can readily be configured to help firms identify and respond instantly to specific words, phrases and emotional indicators whenever they occur – in 100% of calls.
Whether it’s a specific phrase used by a distressed customer, or a team member struggling to respond in a sympathetic and compliant way to a difficult interaction - Voyc will send an instant alert to specified individuals who are designated to deal with the situation. A simple click on the alert plays the precise part of the call that is of concern – and immediate action can be taken to resolve the issue and provide support for the customer and team member as required.
Nick McDonald, Co-Founder at market-leading consumer credit specialists, The Compliance Guys, says,: “We’ve seen an increase in consumer credit activity due to the cost-of-living crisis and a growing need for responsible lending- and Voyc is helping there.
“Firms can instantly spot calls where the customer perhaps did not fully understand and step in to manage the situation without delay. That amounts to excellent customer care and reduced cases of poor customer outcomes.
“On top of that, the Voyc reporting function provides the evidence needed to demonstrate that firms are doing right by the customer as the cost-of-living emergency unfolds."
Find out more – with a free demo
Discover how Voyc could help your business to communicate effectively and compliantly with customers through the cost-of-living crisis and beyond.
Simply contact us here and we’ll answer all your questions and provide full information. We’ll also offer to give you a Free Demo of Voyc in action on your own screen and using your own data if you wish.
There’s no obligation, of course, and we’d be delighted to hear from you.