Dealing with bereaved customers and those with powers of attorney - key observations from the FCA’s Multi-Firm Review

On the 12 April 2025, the FCA provided a concentrated review on how banks and building societies handled customer bereavement and power of attorney (PoA). Whilst the review focused on banks and building societies, its findings also apply in principle to authorised payment firms and authorised electronic money institutions.

Importantly, in its four priorities under the 5 year strategy, the FCA included its need to work with industry to help consumers navigate their financial lives and make the right decisions with relevant support. In-scope firms can make an essential difference in supporting service users dealing with a bereavement, or handling PoA arrangements of the customer account or access to their financial services.

The key messaging from the regulator is that when firms are approached by customers in these circumstances, they must initially recognise the need for additional help and then respond with an appropriate quality of customer care to advance the customer’s experience in the best way possible for them.  

Cross-examination of the four key findings

Generally, the FCA’s review found acceptable levels of vulnerability management in firms’ control frameworks but this was not always the case.

Notably, the review pointed that ‘good practices’ require the acceptance by firms of the electronic ‘verification of death’, avoiding the need for claimants to send in Death Certificates to prove the death of the account holder. This proposal provides for an appropriate approach to sensitive circumstances which could otherwise impair a good customer experience. We have found that front-line teams in payment and e-money firms have had the uncomfortable experience (on both sides) of having to ask representatives for hard copy evidence of their relative’s death. Though, suitable training and procedures could avoid awkward conversations or unnecessary questions. Perhaps a Vulnerability Champion could be assigned to help with these conversations?

There are some interesting points from the FCA’s four key findings in the review referring to areas working effectively, and those requiring improvement which are outlined below:

For policies and procedures, the FCA found evidence of staff being unclear as to what action to take, exacerbating the distress for some customers and their representatives when they did not get the support they needed. It is therefore important that guidance for staff is easily accessible and understandable, as well as enabling staff to adapt their style to customers’ needs.

In identifying and responding to customer needs, firms were generally found to have embedded and developed systems to capture data about customer vulnerabilities and support needs for staff during the customer journey. The observations indicated some intelligent use of data to identify potential risks of customers becoming vulnerable in certain circumstances; this extended to some firms using artificial intelligence to detect possible vulnerabilities such as speech analytics. But given the current economic climate, could the regulator reasonably expect firms to invest in better technology so soon?

The regulator considered that staff had failed to notice that customers were distressed and upset which meant they were not treated with the necessary level of empathy when managing a bereaved’s account. It’s reasonable to assume here that the causal link is the lack of additional training or competency checks on staff performance.

The recurring theme of outcomes monitoring and testing in Consumer Duty was raised by the regulator in that some focus was on customer behavioural patterns suggesting that good outcomes were produced to a degree. Interestingly, firms were collating data metrics on, say, the time taken to register PoAs or defund accounts in bereavement cases, reviewing complaints volumes, drivers, and customer case studies. But it was found that the data was not scrutinised in the right way by firms, implying that it had not clearly indicated if positive or negative outcomes were being received by vulnerable customers. If the data is not making sense at first line and second line, it leaves senior management with an incomplete or misinformed set of data - so how should firms build out their Management Information (MI) framework to manage data from accounts involving bereaved customers?

Lastly, the FCA considered that most firms considered how bereavement/PoA customer journeys should be managed in the most straightforward way. It was observed that most firms had dedicated bereavement teams or specialist advisors who contacted customers by video or phone calls. But this solution is assumed to have worked effectively for banks but wouldn’t necessarily be implemented by smaller payment firms, so how can firms make good use of their resources to ensure their customers are afforded with the same treatment?

From a delivery channel standpoint, firms should ideally look at all of the accessibility channels used by customers to contact the bank during the entire bereavement/PoA journey. In particular, the use of mobile apps and online banking may not necessarily be a useful avenue for the elderly or technologically disadvantaged, or even the most effective method of discussing a relative’s bereavement, although for representatives acting under a power of attorney, it may well be the simplest way to operate. The FCA found that this limitation often appeared to be due to the firm’s investment decisions, suggesting access could be expanded if resource was committed to it. Firms should therefore consider whether and how they could enable online and/or mobile app access to representatives under a PoA.

The best course of action

Evidently, applying the ‘human touch’ to customers and providing effective staff training to vulnerable customers - on an ongoing basis - are the most feasible solutions for firms. This means firms should be candid about their current level of customer support and outcomes. They should ensure relevant staff are appropriately trained to manage vulnerable customers at any time in the customer journey, with a sensitive manner. Firms must keep appropriately detailed customer data and should demonstrate effective management oversight of teams looking after customers and related metrics.

If this analysis has triggered some questions, or if you’d like to speak about receiving support with vulnerable customer management in the payments and banking space, please feel free to get in touch.

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