In the past year independent reviews, industry bodies and international organisations have all identified the importance of recording consumer information related to vulnerable circumstances. They identified that adequate recording would facilitate inclusive service, provision of appropriate support and minimise the number of times that a consumer has to explain their vulnerable circumstances (alleviating any additional harm). Outlined below is some of the discussion that has occurred in this space. 

We outline below three types of flags to record information relating to vulnerable circumstances: automated flags, manual flags and self-appointed flags. Appropriate use of system flags will help banks:

1. Provide bespoke support to individual consumers;
2. Minimise the number of times that a consumer needs to explain their vulnerable circumstances (including accessibility and/ or inclusivity needs);
3. Monitor the outcomes for consumers in vulnerable circumstances, informing continual improvement of related processes.

Outlined below is a high-level description of the types of flags that can be deployed by banks. (Note: we do not explore all the types of system flags available, nor provide an exhaustive description of how they should operate, as each banks’ environment is different). 

The BCCC Inquiry Report identified that banks have privacy concerns recording information relating to vulnerable circumstances, particularly relating to the privacy principles around collecting and using personal and sensitive information with valid consent, and ensuring personal information is accurate, up-to-date and complete. However, despite concerns surrounding privacy laws and requirements, the BCCC “cautions banks against treating their privacy requirements as a barrier to providing the appropriate level of care to customers. The BCCC anticipates that the ABA’s work with the OAIC will address some of the banks’ concerns in this area”.8

The Australian Government is currently conducting a review of the Privacy Act 1988. Exactly how data requirements may change following this review, and in the wake of recent breaches of consumer data, to align with industry and consumer advocate expectations is unclear. It is a space that will be tracked closely as the privacy landscape adapts to protect consumers, especially those who may be experiencing vulnerability.

As the pandemic effects still linger and consumers face the uncertain economic environment and geopolitical tensions, more consumers than ever may experience one or more vulnerable circumstances. It is important that bank processes and policies are appropriately established to effectively support consumers in vulnerable circumstances in a manner that does not cause or exacerbate their harm. One way to do this is by recording their extra care needs due to vulnerable circumstances appropriately and compliantly to minimise the number of times a consumer has to provide the information. This will require considerations around systems, data privacy, and consent and notification practices.  

We can support banks as they consider how to meet the rising expectations of industry bodies, consumer advocates and, most importantly, their consumers. This support may include helping banks to understand their current state, identifying opportunities to uplift systems and practices; or, developing more tailored and pragmatic solutions.