Investor in Customers already provides a suite of reports, assessing outcomes for firms. The MorganAsh Resilience System (MARS) assesses, measures and reports on the vulnerability of consumers.
Under Consumer Duty, firms must report on outcomes for consumers – including how these affect vulnerable consumers. By incorporating vulnerability data from MARS, Investor in Customers can now provide their outcome reports in detail – correlated for consumers’ characteristics. This meets the evidence and reporting requirements of Consumer Duty for the four outcome areas and the cross-cutting rules.
The analysis includes the proportions of each characteristic at several layers of granularity and severity (for example, health – physical health – sight loss; and engagement capability – language issues – degree of language capability). This means that firms can understand how they perform for the numerous consumer characteristics – and can then accurately target improvements, where required.
Details of any next steps which have been implemented can also be compared, to see if these have been effective in mitigating the potential harms identified.
MARS also enables firms to collate protected characteristics data on consumers. Protected characteristics are the list of characteristics specified within the Equalities Act 2010. Under Consumer Duty, firms are required to report on how they meet the Equalities Act. Using MARS, firms can now report on how their outcomes map across groups of similar protected characteristics – and if there any biases of concern.
MARS includes an objective Resilience Rating which ensures that a consistent assessment of vulnerabilities and their severity are recorded – leading to consistent reporting and management information. The Resilience Rating also enables data to be shared on an anonymous basis, thus minimising privacy and GDPR issues when collecting, collating and sharing data .
James Edmonds, director at Investor in Customers, commented: “We can provide granular detail on the performance of companies across the numerous consumer characteristics – and on how mitigating strategies are being received by the customers. This is far more sophisticated than just comparing performance against the vulnerable and the resilient, an approach which will leave firms struggling to understand the cause of any underperformance.”
Andrew Gething, managing director of MorganAsh, commented: “The most cost-effective way to provide data on vulnerability characteristics for outcome reporting is to collate data from individual vulnerability assessments. To provide quality data, a consistent method of measuring and recording the vulnerability is vital. Far too many organisations undertake subjective vulnerability assessments; these embed inconsistent data and are a nightmare to unscramble for firm-level outcome reporting.”
Speaking on the partnership, Sheridan Davy, chief risk officer at James Sharp said: “We have been working with both MorganAsh and Investor in Customers to provide the appropriate data and evidence for us to meet Consumer Duty. Sharing the data will give us greater granularity or reporting, so that we can evidence to our board how we comply with Consumer Duty – and any areas for improvement.”
MARS is designed to help firms both understand and monitor vulnerable customers – and to deliver good outcomes – as required by Consumer Duty. Through clear and consistent assessments, businesses can identify vulnerable characteristics and generate the objective MARS Resilience Rating – much like a credit score.
Recently, MorganAsh released upgrades to the MARS tool including the ability to trigger appropriate treatments (next steps) when customer vulnerabilities are detected. Automating this process relieves advisers from having to train and understand the multitude of vulnerabilities and treatments. Effectively, firms’ vulnerability policies are effectively presented for each client when they are required.
FCA handbook references
PRIN 2A.4.8 (4) any characteristics of vulnerability that retail customers in the target market display and the impact these characteristics have on the likelihood that retail customers may not receive fair value from its products.
PRIN 2A.4.11 (1) whether any retail customers who have characteristics of vulnerability may be less likely to receive fair value
Monitoring of Consumer outcomes PRIN 2A.9.1 to 10