In this guest post Carl Packman, Head of Corporate Engagement at Fair By Design, takes a look at the FCA’s latest vulnerability guidance and explores how the new guidance will incorporate principles central to inclusive design.
Fair by Design and the Money Advice Trust are working in partnership on the Inclusive Design in Essential Services project exploring the issue of inclusive design in credit, insurance , energy and other essential services markets.
The Financial Conduct Authority (FCA) has recently published its long-awaited feedback statement on the case for treating vulnerable customers fairly, covering off the costs, the benefits, and giving us the opportunity to have our say on the way the final guidance will look.
The FCA defines a vulnerable consumer as “somebody who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.” This statement represents the next step for seeing firms embed fairness throughout their policies and processes.
On first reading there is much to be pleased about. There is updated evidence on potential harms to which a consumer may be vulnerable, and new suggestions for what emotional support ought to be given to consumers by frontline staff (all of which Chris Fitch has adeptly covered in his blog on these pages).
Inclusive Design: from the physical environment to essential services
Inclusive Design is fast becoming a concept that cannot be ignored. It’s a process that bridges two separate, yet important considerations: how should something be designed, and who for?
The FCA defines it as: “features of [a] product or service which ensure the needs of vulnerable customers are met, while at the same time benefitting a wider range of consumers.”
Put another way, it’s about how designers of products and services avoid trying to fit “square pegs into round holes” – and it has the potential to utterly transform our experience as consumers.
The classic illustration for Inclusive Design is the dropped kerb. The drop in a kerb on a walkway was originally designed to help people using wheelchairs or pushing prams/pushchairs. It ended up being more generally useful for people with poor balance. Thereafter it was a helpful indicator for where was best to cross a busy road. As a result, many more people than originally intended benefitted from the drop.
This neatly describes the double benefit of Inclusive Design: not only do you design for people with additional needs (which is just and fair), but also (perhaps inadvertently) design something that works for everyone.
Inclusive Design should encourage product and service designers to consider the accessibility and usability of what they have created: are there any design features faults that will make access difficult or impossible for some people? If there are, how can changes be made to put that right?
This brings us nicely onto how firms obtain information about consumer’s additional needs. With all the will in the world, expecting product and service designers to imagine what these additional needs are, and to know how it feels for your needs to be ignored is unrealistic.
But that can be addressed by engaging people with direct experiences of vulnerability – bringing to life issues that different people experience when using products and services. In this way problems for people can be designed out.
The FCA’s vision for Inclusive Design
The FCA’s latest work on vulnerability begins by stating what a well-functioning financial services market that works for consumers will look like. It is one in which consumers can buy the products and services they need because they are sold in a way that is fair, that meet consumers’ changing needs, and where the needs of all consumers, including vulnerable consumers, are taken into account.
On the latter point, firms are encouraged to ensure they meet the needs of consumers at the greatest risk of harm because these consumers “are more likely to require support and adaptations than other consumers”. The FCA says:
“firms should … act early to prevent risk of harm growing. For example, by ensuring their products and services have been designed to recognise and respond to the needs of vulnerable consumers in their target market and customer base.”
This is the theoretical basis of Inclusive Design. What really matters is its practical application, which the FCA gives some examples of. These include optional blocks on payments to gambling firms to help consumers who would benefit from greater control of their spending on gambling. Another is support systems to help consumers designate a second contact in case they become unable to manage their financial affairs.
During what the FCA calls the “idea generation” phase of developing a product or service, it describes how companies could spend time understanding what vulnerable consumers might need, because “this will help firms anticipate and proactively address difficulties vulnerable consumers may have over a product’s life.”
According to the FCA, doing this “may prevent potential harms from occurring, and deliver better outcomes for vulnerable consumers”. This focuses on how Inclusive Design is not simply something nice-to-have, but is directly linked to treating all customers fairly (including vulnerable customers), and helping them to achieve good outcomes, which is good for both the consumer and the firm.
Though Inclusive Design only accounts for a small part of the new FCA guidance on vulnerability, it is an absolutely vital component. It demonstrates exactly why vulnerability and vulnerable consumers should be considered right at the start, in the early design phases of any financial service and product. It also starts the process of giving practical examples for how firms can begin to incorporate Inclusive Design principles, and where they might be most relevant in a product or service.
It represents an important turning point to see this concept used in this guidance. The next stage will be to crystallise how the concept can be applied across the financial services market, and indeed across different markets under different regulatory authorities. The next step will be the provision of clear guidance on how firms can apply Inclusive Design. This is the gap that our continued work on Inclusive Design will help seek to fill.
You can find out more about the Inclusive Design in Essential Services project, being run by Fair By Design and the Money Advice Trust here.