Almost one in four consumers are financially vulnerable

New research from Tink has found that almost one in four (23%) consumers are ‘financially vulnerable’, with the majority (56%) expecting their situation to get worse over the next 12 months.

The research also found that 56% say the situation will worsen as they expect their discretionary income to fall over the next 12 months. As a result, some of them have already made difficult choices – one in five (20%) of the ‘financially vulnerable’ report having missed a monthly mortgage or rent payment, and a similar amount (22%) have cancelled financial products such as insurance.

With rising expectations for firms to put their customers’ needs first and deliver improved outcomes, there is a clear demand from consumers for more help. One in two (51%) of those categorised as ‘financially vulnerable’ agree banks should provide financial support to customers during the cost-of-living crisis.

Meanwhile, 43% of those identified as ‘financially vulnerable’ say they would like to learn more about managing their finances and how to optimise them, and more than half (58%) believe banks should make financial services more universally accessible.

45% of the ‘financially vulnerable’ would switch to another bank if it identified better deals or money saving opportunities for their monthly outgoings. A further 37% would make the switch if another bank provided them with the tailored financial support they need during this time.

Tasha Chouhan, UK & IE Banking Lead at Tink said “It is clear there is an appetite for more support from banks amongst those experiencing financial distress. Open banking has a vital role to play here – with data driven financial services giving financial institutions an opportunity to identify struggling customers and provide tailored support and interventions to assist them. Not only can this make a meaningful difference to people who are bearing the brunt of the cost-of-living crisis, it also helps financial institutions to meet enhanced regulatory requirements around protection of financially vulnerable customers.”