Study on risks and opportunities of digitalisation for financial inclusion. The perspective of vulnerable users in Estonia, Italy and UK with a focus on groups covered by the European Accessibility Act

The digitalization of financial services presents an unprecedented opportunity to increase the financial autonomy of millions of vulnerable people across the European Union. Implemented carefully, with reference to their needs, digitalization can benefit vulnerable groups, society as a whole, and - not least - the financial services organizations, which stand to gain from attracting more customers. But vulnerable people are not currently benefiting from this digitalization as best practise design and specifications are not always followed. There appears to be a lack of commitment on behalf of the financial institutions to use this opportunity to benefit the most vulnerable in society. This report aims to describe how digitalization, in the form of online banking services, is affecting end-users in vulnerable groups. It was commissioned by the European Commission for the Financial Service User Group (FSUG) and examines the state of financial inclusion of vulnerable people in the United Kingdom, Estonia and Italy. The report deals with view of the end-users, in particular it presents detailed information from the point of view of people with disabilities given the current context of the European Accessibility Act. Relevant responses were received from a range of end-users and organisations of end-users. In particular detailed comments were received from end-users and organisations of people with a sensory impairment. The report focuses on the provision made by the financial sector for accessibility to services, in particular through ticket machines, Point of Sale machines (PoS terminals), Automated Teller Machines (ATMs) and personal devices such as mobile phones. The study involved extensive qualitative research with people at risk of digital exclusion, due to the introduction of digital financial systems. We also spoke to representatives of organizations which act on behalf of vulnerable groups. The study also made use of quantitative secondary statistics from existing studies on technology and services. The results present a mixed picture of the current situation to financial inclusion. The results show that many of the respondents (both individual users and representative organisations) reported that some systems were useable but added that if a particular user could not use them a third party would act on their behalf. The use of carers and other intermediaries is problematic as it can both remove the autonomy of the end-user and facilitate financial crime against them. Meanwhile many end-users expressed fear of digital financial systems when they were not accessible and when they did not provide information in the form that the end-user could understand. On a positive side, the report found some reassuring information on how digital financial systems could enable vulnerable end-users to use and access their money in a time and place that was suitable for them. This was particularly true for deaf or hearing-impaired ATM users. The report also highlights that despite there being legislation in all three countries it is adopted in very different ways. This includes access to information provided by government departments' online services and by banking service providers. The use of best practise approaches to assist vulnerable people was found to not be used consistently resulting in different levels of accessibility in all three the countries for different users. The research identified a number of positive examples of alternative practise that enabled safe and practical access to digital financial systems. But the main findings were that there is a lack of knowledge about accessible systems and processes among financial services institutions together with a lack of knowledge of the demand for these systems from users. Knowledge-sharing among institutions and countries could be of great value here to assist in inclusion in financial digital services. Results of the findings suggest that there is further work that can be done in this area for financial inclusion of vulnerable people. The comparison of the three countries in the study found that whilst technology can assist these people, it is often used by the financial sector to provide efficiency in business processes, often at the cost of access to those that are vulnerable. The following recommendations are based on the research findings carried out in the study. 1 The financial sector should consider the impact of change, innovation in technology and access to technology when providing: a. New services b. Amending services c. Curtailing services due to the adoption of technological solutions and efficiency driving measures d. Training for employees administering the services e. The sector should anticipate vulnerable people’s requirements for assistance, training and accessibility. Investment in new innovation should not be at the expense of exclusion of any sector of the population. The advancements in financial services and increasing use of alternate financial systems should be recognised by the regulated sector and provisions be made to assist all users and vulnerable users. This includes the training of employees to anticipate the requirements and difficulties that vulnerable persons may experience. Protection of vulnerable peoples should be at the forefront of those in the financial sector and the consideration of increasing lifespan of people globally means that vulnerability changes over a lifespan. Therefore, a concerted effort should be made for users that are currently vulnerable, those that may become vulnerable by ensuring security measures are safe but do not exclude this user group. This may be achieved developing technology, improving usability methods, recognition and secure measures for third party carer givers. 2 Financial service providers should ensure that technology and services are accessible (online and in person), that they meet local and EU accessibility legislation and best practise criteria and that they adopt the recommendations of organisations such as the W3C. This would ensure all users would experience similar security and autonomy when accessing services. 3 Interest groups that represent vulnerable persons should consider more effective strategies to represent the concerns of the vulnerable at national levels in Estonia and Italy, whereas such groups in the UK have more direct involvement with providers of financial services. Such concerted co-ordination will increase the recognition of how financial service providers should meet their obligation of inclusivity and accessibility. 4 Information on alternative ways of accessing services including the use of talking ATMs should be published by both the financial institutions and local and regional support groups to enable end-users to make informed decisions about their use of digital financial services. 5 Recognition must be given to the use of care givers acting as conduits to financial services. Secure measures must be designed to protect vulnerable persons, care givers and the financial service providers from a. Prospect of financial crime b. Risk in using carers to terms and conditions of these providers Furthermore, consideration needs to be given as to the transparent response mechanisms to be provided and action to be taken if financial crime takes place, that takes into account vulnerabilities of the user.