Having had well over 25 years to ponder Issues Arising in my world of financial services marketing, I tend to think that I’ve pondered the very large majority by now. At an MRS conference yesterday, though, I realised that there’s at least one more chamber in the Mansion of Issues with a door that remains unopened.
The realisation occurred while I was taking part in a panel discussion about the so-called Financially Vulnerable, and specifically (this being an MRS conference) when and how research should be carried out among them.
The trickiest bit, as is very often the case, was the definition.. Should we include among the financially vulnerable any or all of:
– The 10 million or so adults who are defined as vulnerable by the Money Advice Service because they don’t have any savings, protection, pensions and so forth and so have very little resilience to any mishap with financial implications?
– The many million of adults who simply have very little money and so are vulnerable to the wheels falling off?
– The equally-many millions of adults who may or may not have little money, but who suffer from a huge range of disabilities making it difficult for them to make good financial decisions: those who can’t read or write, those who are innumerate, people who speak no English, people suffering from mental illnesses ranging from the most severe to those which are less severe but can still affect judgment, etc etc etc?
– People who may well have a lot of money, but because they’re old, or lack confidence, or are simply silly, are too easily persuaded to make bad decisions about what to do with it by unscrupulous sales people?
– People who have a lot of money but lack the financial interest and engagement to be at all concerned about making the most of it?
Frankly, it’s pretty hard to imagine anyone who doesn’t fall into at least one of these groups at least some of the time, so when you think about the whole Financial Vulnerability thing it’s easy to conclude that in much the same way that We Are All Individuals, We Are All Also Financially Vulnerable.
But that’s not really what I wanted to write about. The thought-provoking bit – the unopened door – became apparent when someone asked, pretty much regardless of your exact definition of vulnerability, whether or not the financial industry has a “duty of care” to whoever you include.
Immediately, a man with an important public sector research job excitedly shouted: “Oh yes! Oh yes! Oh yes.” No doubt what he thinks. But was he right? And if so, how right was he? And what happens when the things you’d do if you were exercising a “duty of care” start to deviate from the things you’d do as good business practice?
Start with an easy example. A lot of French people live in South Kensington. It would be good for them, and good for business, for a bank to install some French-speaking staff in the Harrington Gardens branch. But that certainly doesn’t mean that all branches of all banks should be able to speak to customers in all languages. It would be ridiculous to demand a Tagalog or Swahili speaker in the Bridlington branch just in case someone from the relevant parts of the Philippines or East Africa dropped by.
Take a less visible case. If a customer suffering from a mental illness is incapacitated to the extent that they can’t cope with making mortgage repayments, you’d expect their lender to respond sympathetically. But what if a customer suffering from depression gets some relief from horribly expensive spending sprees? Does a “duty of care” mean that when a credit card company notices a customer bulk-buying Louboutins again, it should decline the payment and tell the customer to see their GP?
Or – just one more, and then we’ll move on – say that a credit card company is researching the potential for contactless payments cards among its customers. First question: should they specifically include people who have serious debt problems among the research sample? And second question: what is the company to do if it finds that some of these people are likely to use the cards irresponsibly? Should they scrap the project altogether? Should they adopt a tougher credit scoring system so that the new cards are less widely available than the old ones? Or should they simply offer the new cards to anyone who isn’t in arrears at the moment?
The more I think about this, the less I’m convinced about this “duty of care” thing. When good customer care is in line with good commercial behaviour – the French staff in South Ken – there’s no problem. But when maintaining a duty of care involves significant extra expense, and/or much more intrusive and paternalistic behaviour, there’s a limit to what you can reasonably expect from a commercial organisation.