While improving responsiveness to customers experiencing vulnerability – including those experiencing domestic violence – is a hot topic for financial institutions in NZ and overseas, it is an issue for many other businesses who serve the public as well.
Financial sector response to customers experiencing domestic violence:
According to the UK’s Financial Conduct Authority in a 2015 report, “A vulnerable consumer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care. Vulnerability can affect people’s interaction with any consumer market, but it is particularly challenging in the context of financial services, due in part to the long-term nature of commitments, and the complexity of products and information.”
In 2015, an Australian Royal Commission investigated financial sector misconduct. As a result, the Australian Banking Association created a new Banking Code of Practice which contains specific provisions in relation to vulnerable customers.
Similarly, in 2017, members of UK Finance and the Building Societies Association worked with charities, victim support groups and government departments to develop a voluntary Financial Abuse Code of Practice.
In 2018, the New Zealand Financial Markets Authority and the Reserve Bank of New Zealand launched a joint review in response to the Australian Royal Commission into financial services misconduct, which had dominated headlines in the Australian business pages in the previous year. The resulting report found no evidence of widespread misconduct, but it did make some key recommendations, including around meeting the needs of vulnerable customers.
In June 2020, the NZ FMA published ‘Customer Vulnerability: our expectations for providers‘, an information sheet explaining expectations for financial services firms to prioritise a review of customer vulnerability practices in light of the COVID-10 crisis, focusing on areas the FMA considers immediate priorities.
We look forward to supporting and collaborating with financial institutions and other NZ businesses to help meet the needs of your customers who experience domestic violence. Ultimately, our mission is to end domestic violence in Aotearoa New Zealand, and this is one critical strand of achieving that mission.
See TV1 News story with Shine’s Holly Carrington – Banks aiming to help customers experiencing vulnerability.