Calling for a sector-wide charter for vulnerable customers to be established, the report comes amid continuing financial pressure on households, with stubbornly high inflation and rising interest rates causing hardship across Scotland and the rest of the UK.

It also recommends that firms to go beyond the new regulatory minimum requirements to ensure customers receive the best service and care possible introduced by the FCA through the consumer duty.

This, along with the report’s other recommendations, will be delivered through a new customer working group, which will be tasked with sharing and enabling best practice in areas like use of technology, staff training, and driving innovation to make products and services more accessible.

By targeting these areas, the industry hopes to respond more rapidly to needs of vulnerable customers, improving financial wellbeing and inclusion.

The report was written in response to SFE and Standard Life’s recent Vulnerable Customers Summit, which brought together experts and leaders from organisations across financial services, data and the third sector to develop a collaborative industry-wide approach to supporting vulnerable customers.

The past few years have seen UK financial services firms encounter unprecedented levels of customer vulnerability, with the current cost of living pressures immediately following the emotional and, for many, financial impacts of the pandemic. Standard Life recently uncovered that:

• Only 41% feel positive about their financial situation
• Only 61% of people feel confident making financial decisions
• 59% worry about spending too much now, in case they run out of money

Sandy Begbie, SFE’s CEO, said: “Now more than ever, it is absolutely essential that Scotland’s financial services industry plays its part in supporting customers who are struggling.

“We’ve seen how the cost-of-living crisis has compounded many of the challenges built up during the pandemic, with increased financial pressures hitting the most vulnerable the hardest. The industry is moving in the right direction, but we know we can and must do more.”

Riffat Tufail, head of customer vulnerability, Standard Life UK, said: “We were delighted to host the summit and bring together SFE members to have some inspiring conversations about how we collaborate and continue to raise the bar for all our customers.

“We know that people don’t always disclose vulnerabilities to firms and as an industry, we want to encourage them to do so. Knowing more about our customer’s individual needs is the first step to providing the support that’s right for them.”