We often talk about the importance of improving customers’ financial health. But today, when one in two UK adults feels more stressed or anxious because of the increased cost of living, it’s clear that their wellbeing needs to be priority too.
This means seeing customers as more than profitable or non-profitable – it means seeing them as people. It means asking questions like: do they have food on the table? Do they have money to support their children? Do they have the means to support their ambitions?
This holistic approach matters. Here’s why, with four practical steps for protecting your customers’ financial health and wellbeing through company-wide change.
Customers’ financial health and wellbeing: a cycle
People’s financial health and overall wellbeing exist in a cycle. If someone’s struggling to feed themselves or keep the heating on, their mental health will suffer. And when this happens, their financial health can deteriorate too. As Forbes points out:
“Making good financial decisions is harder when our mental health is challenged, as you might be more prone to impulse purchases, not paying bills on time or not setting aside enough money to build up your savings account.”
Nevertheless, many processes compartmentalise people’s experiences. For example, landlords might categorise someone who has missed a few rent payments as a risky tenant, but may not take into account that they’ve recently lost their job and are prioritising food for their children.
Instead, how about acknowledging their complex circumstances to provide tailored financial and wellbeing support? This might be the difference between legal battles and reputational damage (plus unrecovered rent) or a loyal tenant who’s committed to paying what they owe.
It’s only by seeing your customers as people that you’ll be able to start building trusted relationships with them, stay compliant to consumer-facing regulations, and ultimately improve their financial health.
4 ways to protect customers’ financial health and wellbeing
Consider their wider circumstances
An important starting point is to develop a comprehensive view of every customer. Do they have debts with other creditors? What are their incomings and outgoings? Are they currently dealing with any immediate issues, like an inability to pay for food or heating?
With our digital debt support platform, Elifinty, we make it quick and easy to gather this information though digital document sharing, open banking, and CRA APIs. This allows you to develop more comprehensive customer profiles, analyse their financial situation as a whole, and create more realistic next steps.
Define your processes and pathways
When it comes to deciding on the next steps for vulnerable customers, consider how you‘ll match them to the most appropriate support. For instance, think about your payment plans: do you have different pathways for customers with 0% affordability and those with 95% affordability? Everyone’s circumstances are different, and therefore their support pathways must be too.
Sometimes, the best pathway won’t be a payment plan. Energy customers might need fuel vouchers before they can repay overdue bills, for instance, or tenants might need mental health support before they can catch up on rent. If you don’t have an in-house team who can provide this, think about how you can outsource it – such as to specialist debt advisors.
The way you speak to your customers matters to their wellbeing and their financial health. In fact, research from the FCA shows that more than 40% of people struggling financially ignored contact from their creditors because they felt ashamed. What’s more, the Money and Mental Health Policy Institute found that capitalised text and legal jargon in default notices can confuse people, impact their mental health, and prevent them from managing their debt effectively.
By communicating in a way that acknowledges your customers as people rather than bad financial actors, you make it easier for them to not only access support, but also to continue along the support journey. This is easier with the Elifinty platform, which has three connected hubs for consumers, creditors, and debt advisors. It empowers vulnerable people to receive support when and how it works for them, whether digitally or in person, which helps you to build more trusted relationships.
Invest in technology
By investing in debt support technology, you can free up your customer service agents – and third parties, like debt advisors – to deliver more holistic care. Automating processes that can be done through APIs or AI, such as gathering financial data or adjusting payment plans, ultimately gives your teams the freedom to implement the advice we’ve discussed above.
From developing a holistic view of every customer, to identifying the right support quickly, to removing any potential communication barriers, the right technology can help you look after your customers’ financial health and overall wellbeing.
For more advice on how to take a holistic, wellbeing-focused approach to debt support with technology, head to our resources page. Here, you’ll find our advice for building trust in light of regulations like the Consumer Duty, creating better relationships with vulnerable customers, the importance of financial aftercare, and much more.