Financial services firms are failing to ask the right questions about domestic and economic abuse, leaving a significant number of vulnerable customers unidentified and unsupported, vulnerability specialist MorganAsh has warned.
Analysis from the firm’s MorganAsh Resilience System platform shows that just 22% of customer vulnerability assessments carried out through the system included questions relating to domestic abuse.
In many cases, firms chose to omit the topic altogether, citing concerns about embarrassment, awkwardness or the risk of annoying customers.
Yet where such questions were included, 5% of consumers disclosed that they were experiencing some form of abuse. That figure sits squarely within national prevalence estimates of between 4% and 8%.
The highest proportion recorded by a single firm using the platform was 8%, reported by a digital lender.
WIDER SYSTEMIC GAP
MorganAsh argues that the data points to a wider systemic gap across financial services, despite extensive guidance from trade bodies and charities, including Surviving Economic Abuse.
Concerns remain not only around identification, but also around assessment, monitoring and support. Consumer advocates have repeatedly highlighted structural barriers such as the separation of joint finances, the treatment of joint products and the handling of coerced debt.
UK Finance’s From Control to Financial Freedom work has drawn attention to these issues and the ongoing challenges facing victim-survivors.
Andrew Gething, managing director of MorganAsh, said: “Many firms are at present opting to not to include coercion or abuse indicators within their vulnerability assessments, for fear of annoying their clients.
“Social stigma on the topic, a finance industry predominantly managed by men, and fear of embarrassing conversations all lead to reluctance within the industry to even start to address the problem.
“While some firms have adopted the guidance of charities and trade bodies, this is mainly restricted to training frontline staff to be more empathetic and pick up the pieces when alerted to abuse – without making material changes.
“There is a need to embed identification, monitoring, support and reporting within firms in the same way as all other vulnerabilities.
“In truth though, there are still many firms falling short at this stage, lacking the knowledge, technology and data to identify and respond to customer vulnerability more broadly.”
The findings come as regulatory and industry focus on vulnerability continues to intensify. New guidance issued by the Chartered Insurance Institute and the Personal Finance Society sets out a practical implementation framework for managing customer vulnerability, translating the principles of Consumer Duty into operational requirements.
The guidance emphasises the need for appropriate IT systems, processes and data infrastructure to identify, classify, monitor, support and report on vulnerable customers and outcomes.
MorganAsh says its platform aligns with these requirements and can operate either as a standalone system or via API integration with existing firm infrastructure.
The warning also coincides with a broader push to raise awareness of economic abuse. AXA UK has launched a national campaign focused on the hidden signs of domestic abuse, while the Chartered Insurance Institute has published further guidance for general insurance providers, developed with Surviving Economic Abuse, aimed at improving outcomes for victim-survivors.
