Governance, risk & compliance


From benefits calculators to free advice, banks have plenty of opportunities to support customers with the ongoing cost-of- living crisis.


increase in National Insurance rates, this is the third stretch in a decade that real wages have shrunk in Britain, and the biggest squeeze on household incomes since records began in 1956. When considering all these factors, it is fair to say that the now infamous ‘cost-of-living crisis’ moniker is by no means exaggerated.


This listing makes for depressing reading, but


it’s especially critical to highlight the reality for the country’s most vulnerable. The number of people on Universal Credit has doubled from its pre-pandemic figure, falling just short of six million as of January 2023, with a record number of households now relying on food banks.


Ryan Walker,


customer service lead, Virgin Money.


To their credit With all these challenges coalescing, it’s clear that something must be done – and banks can surely play a meaningful role.


Michelle Highman, chief executive, The Money Charity.


While they may not have control of inflation, food or energy prices, financial institutions can help their customers to navigate the crisis – for the ultimate benefit of both parties. With the Bank of England raising its base rate to 4% in February 2023, institutions need to ensure their customers are protected from further debt or defaulting on loans, risking insolvency. Banks not only have a moral duty to protect their customers but also a regulatory one, thanks to the industry regulator, the Financial Conduct Authority (FCA).


5.9million


The number of people on Universal Credit in the UK as of January 2023.


DWP 32


Since July 2022, when the FCA wrote to over 3,500 lenders, urging them to raise their game in supporting customers, banks have stepped up in several ways. NatWest and its wider group of banks have contacted customers to offer free financial health checks, while Barclays hired over 1,000 customer service staff to offer specialised financial management support. For their part, Lloyds Banking Group and HSBC UK have offered selected customers


interest-free overdraft extensions of up to £500, with HSBC waiving early closure fees on certain fixed-rate savings accounts.


Apart from that, many lenders, including Metro Bank and Virgin Money, have set up their own ‘information hubs’ to offer dedicated advice to their customers. “Virgin’s online cost-of-living hub has lots of information on the various schemes available to help customers and how to access these, as well as details on choosing the support that’s right for you,” explains Walker, Virgin Money’s customer service lead. He also says his employer has both in-store and contact centre colleagues that are on hand to listen to customers’ needs and point them toward the most suitable support available. To put it differently, these information hubs serve a vital purpose to make sure customers are kept informed – and crucially – empowered to manage their money. As far as banks themselves are concerned, moreover, offering free debt advice is a critical factor of their work, so they ensure customers can seek help without shame and prevent them from suffering worse financial trouble. As Walker says, his bank’s hub “provides regular, free financial advice and can signpost to [external] support services for people that need extra help – whether they’re a customer or not.” Virgin Money has gone a step further, too, by spearheading several charity partnerships, some of which are the first of their kind for a UK bank. For example, Virgin’s partnership with Turn2Us allows customers to check their entitlement to benefits or other welfare schemes using a free online calculator. “We have helped 28,708 people to check their eligibility for welfare benefits and tax credits, and over £1.7m in eligible grants and benefits support has been identified as a result,” Walker emphasises. Nor does Virgin Money’s charitable spirit stop there. The bank has also joined forces with the Good


Future Banking / www.nsbanking.com


fizkes/Shutterstock.com


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