More than one in two people (52%) have risk factors that can lead to vulnerability, according to new research commissioned by the Customer Owned Banking Association (COBA) and conducted by Ernst & Young Australia (EY).
“Our research shows the alarming complexity and prevalence of vulnerability spurred on by COVID-19,” says Michael Lawrence, CEO of COBA.
“People experiencing vulnerability were more than twice as likely to be concerned about their health, and almost three times more likely to report having had their personal relationships suffer or feeling unsafe in their home since the start of the pandemic.”
COBA’s Spotlight on Vulnerability is the first report in an ongoing study that seeks to better understand the prevalence of vulnerability, and the relationship between vulnerable customers and their banking institutions.
“Vulnerability can often show up where you don’t expect it,” says Dominic Thurbon, a partner in EY’s Australia community impact team.
“Normally, we look for vulnerability by looking for the risk factors that are associated with it, but nearly one in four (23%) of those experiencing vulnerability did not associate with any of the normal risk factors,” says Mr Thurbon.
“The last few years have seen a ‘quiet explosion’ in activity in the customer vulnerability space. More and more organisations are starting to ask themselves how they can best look after their most at-risk customers, and this study highlights why that is so important”.
Risk factors associated with physical and mental health were by far the most prevalent (42%), followed by life events and relationships (16%).
Vulnerable customer perceptions of banking institutions
Across all banking institutions, customers experiencing vulnerability were more satisfied with their institution than non-vulnerable customers. However, customer owned banking institutions rated 21 points higher than other banking institutions when it came to vulnerable customer satisfaction (97% v 76%).
“It’s encouraging to see banking institutions doing well in responding to customers in vulnerable circumstances, and it would be remiss of me not to highlight customer owned banking institutions,” says Mr Lawrence.
“Our members outscored other banking institutions across the spectrum of customer perceptions, including empathy, sensitivity and compassion. These soft skills are fundamental qualities of customer service in our sector, and highlight the relationship focus of the customer owned model.”
The research notes opportunities for banking institutions to provide support in a more tailored manner, and to expand customer service to include more relational aspects of empathy and compassion.
“We hope the insights and recommendations put forward by the report are valuable beyond the banking sector as organisations continue to evolve their strategies for supporting customers experiencing vulnerability.”
