The suitability of financial services for people who suffer from mental health issues is a requirement that can never be overstated. While different companies have accommodated services for the blind, audibly challenged and physically handicapped, a new industry report has come to underline the necessity for financial services to innovate for those with dementia.
People with dementia report a litany of challenges when engaging with the financial services and payments industry, according to Retail Therapy, a new report published by the International Longevity Centre UK (ILC) in conjunction with its supporting partner abrdn Financial Fairness Trust.
Through organised focus groups and innovation workshops, the report interviewed dementia sufferers and their carers, a process which raised worrying concerns regarding the way the financial services and payments industry engaged with this demographic.
“People with dementia should be able to access financial services with the confidence that they will be protected and supported if things go wrong,” said Vivienne Jackson, programme manager at abrdn Financial Fairness Trust.
“This report calls for the financial services industry to do more to help this customer group. In doing so, they could make the sector safer and more trustworthy for everyone.”
A lack of sector trust and product understanding were both cited as issues for the respondents, who reported that customer-facing staff were not always trained correctly to service customers of this nature.
Responses also signalled an eagerness for the correct protections to be put in place so that customers are not able to be sold unnecessary products.
The data collected in the report emphasised how vital it is that the industry fully understands how an illness like dementia could lead to risky behaviour and unwise investments.
Too much choice, and a reluctance to accept support or admit vulnerability, were also issues of concern raised by research participants.
The report highlights that while carers are often looked upon to support people with dementia, many do not feel confident in managing money themselves and there is little support available to them. Carers report that bank closures are making access to information and support more difficult.
ILC found that lasting power of attorneys (LPAs) were vital to empower and support people with dementia and their families.
In context, an LPA is a legal arrangement whereby a person with a limited or deteriorating mental capability will nominate an individual to manage their affairs on their behalf.
Of the two different types of LPAs, there can be LPAs that deal with property and affairs and a second type that specifically manages health and welfare.
Although providing a viable solution to financial and asset management for people with dementia, lack of information, cost and time to register were all cited in the report as hurdles to the effectiveness of LPAs.
“LPAs are great but too many people register them too late, both the industry and people with dementia think the process could be easier and more consistent,” explains David Sinclair, chief executive of the ILC.
In addition to these, the financial services industry doesn’t always recognise the power of multiple attorneys, in addition to instances of the sector being ‘overly cautious’; as stated by the report.
Corresponding interviews with the financial services industry revealed that the lack of consistent practice in dealing with customers with an LPA was one of the main causes of ‘miscommunication’.
The report also finds significant issues facing people with dementia in terms of managing payments.
These issues included difficulties in paying with cash and trouble remembering cards’ personal identification numbers (PINs).
However, contactless payments were seen as liberating and empowering for people with dementia (although protections are needed for people with impulse control issues).
“ILC heard that for many people in the early stages of dementia, online shopping and contactless payments were often brilliant,” confirms Sinclair.
“The solutions aren’t just about utilising high-tech, or about changing laws. We need to all be nicer and more supportive of people around us who might take a bit longer to navigate around shops and make choices.”
While there is value in having contactless payment limits, some interviewees highlighted that it could create anxiety at the till when payment limits were exceeded and a PIN input was necessary.
The report authors suggest prepaid or restricted cards could protect independence while avoiding the risk of overspending.
Financial risk mitigation
While ILC were keen to emphasise the importance of maintaining choice and independence, the report suggests that some people with dementia were ‘sitting ducks for financial abuse’.
Researchers highlighted examples of people who had found themselves with subscriptions and direct debits which they may not have actually wanted to set up.
The report argues there is a need for innovation, for example, a hidden disabilities digital lanyard, to easily identify and support people with dementia.
In its concluding statement, the report described various initiatives that would promote the mitigation of financial risks for those with dementia, as well as assist them with financial management.
The ILC used its findings to back calls for a review of LPA legislation to consider whether procedures could be simplified. It recommended the collaboration of governments and dementia experts to resolve issues people face when accessing the LPA service.
Additionally, it called for the same approach between insurance companies and banking providers to co-develop more consistent approaches and procedures for working with attorneys.
“We need to harness the potential of existing and emerging technology to make life easier for people with dementia and their carers,” continues Sinclair.
“The financial services industry must use technology to deliver more and better products and services which meet the needs of people with dementia. At a simple level, we need to ensure that technology, from payment cards to websites, is as easy to use and accessibly designed as possible.”
It appears that calls for better, more personalised services are being heard by the industry, as Johnny Timpson OBE, financial inclusion commissioner and financial services consumer panel member, explains.
“My industry has to step up to the challenges highlighted in this report,” he says. “Regulated firms need to appreciate that if they get it right for consumers living with dementia, they get it right for all vulnerable customers.
“Under the new conduct authority consumer duty, all financial services firms and practitioners must act to deliver good outcomes for retail customers.
“The Financial Conduct Authority (FCA), and the new duty should also spur organisations to innovate to better identify vulnerable customers and securely fast-track their access to support by, for example, developing a dementia and vulnerable customer social prescribing partnership.
“The pension midlife MOT offers an ideal opportunity to introduce consumers to the benefits of having an LPA and why they are essential to pension and lifetime mortgage planning.”