Consumers are more open to answering personal questions about their health and lifestyle than is generally believed, according to new data from the MorganAsh Resilience System (MARS).

Across its users, MARS has reported positive response rates to vulnerability questionnaires, introduced by firms as part of Consumer Duty preparations. While the response rates vary based on the existing engagement with the consumer, it ranges from 60% when questionnaires are sent out cold, and up to 100% when advisers explain to current customers.

While some firms are identifying vulnerability in single figures, users of MARS are reporting the proportion of vulnerable customers between 40-70% – in line with the findings of the FCA’s Financial Lives survey. This figure varies by age and demographic between each firm.

The data comes as firms edge closer to the July deadline to understand and assess the vulnerability of all customers. As part of Consumer Duty, firms must evidence the vulnerability of their customers and monitor this throughout the lifetime of the product. To meet this task, many firms are turning to technology and providers such as MorganAsh for consistent assessments.

Andrew Gething, managing director of MorganAsh, argues that the industry’s fears of consumers not answering health and lifestyle questions are unfounded and actually part of a wider value exchange.

Gething said: “Many in financial services have reservations about consumers answering questions on health and lifestyle – or that they find them too intrusive. The latest real-world data from MARS shows the opposite – that this fear is unfounded. The majority of consumers are open to answering such questions in the pursuit of a better, more tailored service – providing information that is absolutely vital to understand consumers’ characteristics.

“There is also a perception that consumers will bias their answers depending on the transaction. For example, when people are applying for credit, advisers will say clients will not disclose any vulnerabilities for fear of not getting the loan. In practice, this is also far less of an issue than the industry fears. The vast majority provides accurate data.

“This good-quality data not only allows firms to deliver better services, but also to meet the requirements of Consumer Duty – a clear priority with July looming. While a step-change is required to collate, retain and monitor the evidence of vulnerability from clients , the encouraging news is consumers are more willing to cooperate than many might think.”

Gething believes that an acceptable response rate to vulnerability questionnaires depends on how effective the firm is in understanding potential harms and in mitigating those harms to consumers.

Gething added: “If harms are identified and mitigated, then the proportion of participants is less of an issue. Equally, if harms are experienced by vulnerable consumers who did not participate, then firms need to revisit the process.

“Some advisers have taken the approach that they will not progress a transaction unless the consumer completes the vulnerability assessment – much like agreeing to the terms and conditions. Others have left it as voluntary, while they gain experience. What we know is that the FCA has looked badly on firms who only identify single-figure percentages of vulnerability – as clearly their processes are inadequate.”