In 2023, the Financial Conduct Authority introduced the Consumer Duty – requiring UK financial services companies to act to deliver good outcomes for all customers, including those in vulnerable circumstances who are especially susceptible to harm.

Financial organisations are responsible for taking steps to ensure that vulnerable customers are protected and receive consistently good treatment. Research from the FCA, published in 2022, found that 47% of UK adults showed one or more characteristics of vulnerability (such as health challenges, life events, low financial resilience or low capability).

For a bank or other financial service provider to be able to provide additional support or effectively tailor their services to vulnerable customers, they must first understand the prevalence of vulnerability within their customer base – and to do that, they need customers to disclose their circumstances, which isn’t always simple. People may be facing health problems, major life events or financial difficulties – significant but sensitive issues that they might be hesitant to share details on.

A new approach to understanding vulnerability

Phoenix Group partnered with Cowry Consulting and four other financial services firms – Just Retirement, Nationwide, RBC Brewin Dolphin and Royal London – to conduct research investigating the factors that influence vulnerable customers’ decisions to disclose personal information to financial providers, and to identify strategies for encouraging disclosure.

Earlier research conducted by Phoenix Group had found that the prevalence of vulnerability in the company’s customer base was higher than what customers disclosed in their interactions with the business.

Cowry had previously worked with Phoenix on using behavioural science principles to better support vulnerable customers on the phone.

Natalia Gomez, lead behavioural researcher at Cowry, says a behavioural science approach was valuable to understand more about this sensitive subject. “They [Phoenix] were interested in having a different lens to understand the concept of vulnerability,” says Gomez. “It’s not easy for people to accept that they are in a vulnerable position, or maybe they have different definitions of what vulnerability means. So, we had to use an approach where we also uncovered unconscious associations with the concept of vulnerability and try to define those, as well as hidden barriers for them to disclose any information with financial advisors.”

One of the objectives for Cowry was to identify barriers to disclosure, such as emotional associations, or trust in financial institutions, and then provide suggestions as to how the financial services companies could better design their services.

The journey to disclosure

Following an academic review on the topic of disclosure, Cowry analysed the literature through the lens of behavioural science framework, the COM-B model, which says that in order for someone to engage in a behaviour, they need to have the capability, the opportunity and the motivation to do so.

Mallika Bhaskar, behavioural architect manager at Cowry, says: “Through that process, we started identifying certain gaps in the research – a really notable one being that a lot of the research focused on understanding explicit responses and perceptions of disclosure behaviour, whereas our expertise lies in understanding some of those more implicit responses, which have such a big role to play in our everyday decisions.”

The researchers then conducted behavioural interviews designed to uncover how people really feel, analysing non-verbal behaviour and using exercises to identify implicit unconscious associations towards the concept of disclosing vulnerability to financial institutions, before validating themes in a quantitative phase.

Cowry used another behavioural science framework, the transtheoretical model, to map the research findings across the customer’s journey towards disclosing vulnerability across five stages – pre-contemplation, contemplation, preparation, action and maintenance – highlighting the barriers and difficulties at each. For example, in the pre-contemplation stage, the research found a lack of understanding – customers are generally unaware of what disclosure involves and uncertain of its relevance to financial services.

Bhaskar explains: “Essentially, the transtheoretical model says that for anyone to perform a behaviour, they go through five different stages of change. It differs from the COM-B model – where COM-B is more around systematically addressing all the different factors that might affect a particular behaviour, the transtheoretical model adds the additional layer of a temporal element that change doesn't happen in one shot, that it happens over a period of time.

“We wanted to shift the narrative away from disclosure being this one-off, simple behaviour – actually it’s a really complex behaviour that unfolds over a period of time. People go through lots of stages mentally when it comes to deciding whether or not they're going to disclose.”

The final stage of the model, the maintenance stage, is about how you can encourage people to repeatedly perform a behaviour over time. Bhaskar says: “That was important for us because we know that vulnerability is transient. It’s ever evolving. Someone can be vulnerable at one point in time, then not be vulnerable, then become vulnerable again. Their vulnerabilities might change in severity and circumstance.”

“It’s not just about how you get a customer to disclose their vulnerability, but how to create an ongoing relationship with a vulnerable customer and their financial provider, that’s built on trust, that enables repeated disclosure and explanation of their evolving needs over time so that they can continue to receive support.”

Structured recommendations

Based on the research findings, Cowry developed 16 recommendations for financial providers, using the five stages of change to structure the recommendations for each stage.

For example, for the contemplation stage (when customers have become aware of the option to disclose their needs and may begin seeking information), the report recommends:

• Framing communication around disclosure in a way that makes customers feel in control
• Giving customers an easy first step to kickstart the process of disclosure
• Helping customers envision the positive outcomes they can achieve through the organisation's support.

Following the research, the industry partners have created a working group, meeting regularly to discuss how can they action some of the findings and recommendations from the final report, ‘Driving Disclosure: Uncovering hidden barriers of disclosing vulnerabilities’.

The researchers wanted to move away from the idea that there was a “single insight” that would explain disclosure behaviour, says Bhaskar. She explains that the idea behind categorising the findings into five stages was to encourage firms to think about what stage their customers are at and what specific insights would be most relevant to that person, at that stage.

Bhaskar adds: “For me, the most significant insight has been understanding that different behavioural factors influence people at different points in their customer journey – and it doesn't impact everyone equally.”

• The work won the MRS award for financial services research at the MRS Awards 2025. You can see a list of all winners by visiting the MRS Awards website.