Environmental, market and societal factors

This group of factors includes the broader socio-economic and demographic trends such as the ageing population, changing labour market structures, and political trends such as the transfer of risk and responsibility from state and employers to individuals.

Consumers are increasingly becoming expected to use the financial services industry to provide for the future, or protect themselves against risk. These trends may increase the risk that the needs of vulnerable consumers are not met (if they are excluded from the market) or consumers fail to make sufficient provision for various reasons.

Similarly, government and regulatory policy can have unintended consequences on consumers inadvertently contributing to financial exclusion or making it harder for consumers to provide for themselves.

There are also market developments to consider – for example, financial services companies are adopting increasingly sophisticated techniques to segment consumers into different groups according to profitability or risk. This can lead to more consumers being priced out of the market or denied access to products and services altogether.

Financial services providers in this case are not acting unfairly as these market innovations can benefit many consumers. However, it is important to monitor the impact of these market developments.