Businesses urged to consider vulnerable people’s access to financial services

MPs have urged businesses to consider vulnerable people’s access to financial services, with talk of the UK becoming a cashless society.

The Commons Treasury select committee published a report on consumer access to financial services this week. The report states that the UK ‘risks inadvertently becoming a cashless society’ and warned of the consequences for large sections of the public.

The rising popularity of mobile and online banking services is a significant issue that is causing the closure of many high street branches of banks, according to the report.

The committee cited evidence that they have received which shows that bank branch closures have a more significant impact on older people, vulnerable people and those on lower incomes.

Around 8 million adults (17 per cent of the population) would struggle to cope in a cashless society, according to the committee’s previous report on access to financial services.

A rise in IT failures and what the report says is an ‘inability of financial service providers to serve their customers digitally during service failures’ is considered to be a strong argument as to why physical bank branches cannot be eliminated entirely.

Nicky Morgan, chairwoman of the Treasury committee, said: “The importance of financial inclusion cannot be understated. As the World Bank said recently, there can be no end to poverty without financial inclusion.

“The financial inclusion of vulnerable consumers – and we can all be vulnerable at some point in our lives – should be of the utmost priority for financial services providers, the government, and financial regulators.”

The report recommends that the Financial Conduct Authority (FCA) issue guidance to all financial service providers, stating that all communications with customers should be written in language that the average consumer can understand in full.

 

 

 

Posted in Blog, Financial Planning.