Financial Vulnerability and Its Many Guises

Financial vulnerability can affect us all. Due to their personal circumstances, though, those who are financially vulnerable can be at risk of harm. This can become apparent particularly when a firm does not act with the correct level of care.

But what does it mean to be financially vulnerable – and who is financially vulnerable?

Illnesses or health conditions (such as dementia) might affect someone’s ability to carry out daily tasks (including banking), while life events, such as job loss or bereavement, can also play a part.

Resilience might be another factor at play; some people may find it more difficult to survive financial or emotional shocks or setbacks, for instance.

Low confidence when it comes to managing money, or low capability in terms of literacy or digital skills, could affect someone’s approach to their finances, too, as could the after-effects of the pandemic and the current cost-of-living crisis.

Meanwhile, those with mental health problems could even be vulnerable to online scams, with the Money and Health Policy’sCaught in the Web: Online Scams and Mental Health’ report stating that 4.6 million people with mental health problems have been victims of such activity.

Elsewhere, those in abusive relationships can become vulnerable to financial control.

Vulnerability comes in a range of guides, which can be:

  • Temporary
  • Sporadic

‘Consumer vulnerability should be a priority for senior leaders across financial services, insurance, gaming, e-commerce and government’, suggests TransUnion, adding that it requires organisations to ‘invest in data solutions and data  science talent’. This can help companies adhere to ‘evolving compliance requirements, be committed to customer care and have a strategic mindset.’

If, however, you’re someone with a ‘decent regular income and savings in reserve’, says Douglas Fraser (the Business and economy editor for Scotland, for the BBC), ‘you can get away with a certain amount of financial ineptitude. You can't do that if you are financially precarious or vulnerable…’

How are financially vulnerable people being supported?

Technology is playing a vital role in identifying and supporting people who are at risk of financial vulnerability. ‘Artificial Intelligence (AI) can detect sudden changes in spending habits or unusual patterns that could indicate financial distress,’ highlights this article by Leeds University Business School.

Speech analysis tools can also be utilised during customer service interactions to detect vocal stress indicators. These indicators could hint at financial anxieties.   

The financial sector continues to work hard to address issues that arise for people as a result of financial vulnerability, ensuring staff are trained to handle people who need extra help and support.

Supporting financially vulnerable customers: what we’re doing

At Unity Mutual, we undergo regular training to ensure we can better understand the help and support many of our vulnerable customers require when it comes to managing their finances. For our customers with dementia, we’ve compiled a guide which details the help we make available.

For those who are worried about financial scams – or feel they may be more exposed to them – we’ve put together a piece on spotting fraudulent activity and online scams.

We’re also aware that many of our customers are living with a disability. For those with autism specifically, our guide on managing money is designed to make money management simpler and stress-free.

If you’re feeling financially vulnerable, consider opening up to a trusted family member or friend. He or she may be able to offer a listening ear when times are tough, helping you navigate what is a challenging time.

Get in touch with the Unity Mutual team…

Want to know more about our range of financial products* or have any questions for our team? You can contact us here. Similarly, if you’d like to see us cover a specific topic related to financial vulnerability, please do let us know.

Until next time…

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