Research Shows Urgent Need for AI in Customer Service

UK organisations face a considerable challenge in identifying and supporting vulnerable customers at scale, underscoring the need for AI in customer service.

While awareness of vulnerability grows, a hidden crisis persists in the UK, with most consumers still unaware of their vulnerable status.

The second annual survey on customer vulnerability from NICE, the global AI-powered customer service automation platform, reveals a rise in Brits self-identifying as vulnerable, reaching 19% – an increase of over one million people since 2024. Yet, a significant awareness gap remains.

When assessed against Financial Conduct Authority (FCA) criteria, a staggering two-thirds of UK adults – equivalent to 35 million people – are potentially vulnerable, often without realising it. This highlights that many individuals live in vulnerable conditions unaware, leaving them at greater risk as circumstances change.

Richard Bassett, VP of Digital & Analytics at NICE International, said, “This poses a considerable challenge for UK organisations, particularly given regulations like the FCA’s Consumer Duty Act or Ofgem’s Vulnerability Strategy. Vulnerability stems from an increasing range of factors – from financial pressures to personal challenges – making it harder to recognise, even for themselves.

“Subtle cues, such as mentions of stress or relationship breakdowns, often surface during customer service interactions but are easily missed or affected by bias, particularly with human agents. AI and automation provide a critical solution. By analysing customer service data, AI can detect vulnerability during every interaction and provide agents with real-time guidance – ensuring no one is overlooked”.

Young consumers leading in self-awareness

Younger adults, especially those under 34, are at the forefront of self-awareness, with 31% identifying as vulnerable compared to 19% across all age groups. They are also more comfortable discussing mental health with customer service agents.

Darren Rushworth, President, NICE International, said, “The increasing self-awareness among younger consumers is a promising step toward more open communication. However, organisations cannot depend solely on self-identification, as it overlooks those who are unaware of their vulnerability or choose to hide it out of fear, embarrassment or shame.”

“Even when warning signs are flagged, they are often missed if advisors lack the confidence or tools to respond effectively. Worse yet, even when advisors take appropriate action, these cases can still fall through the cracks if workflows and knowledge across customer service are not properly connected.”

Energy and utilities remain the top source of financial pressure

Financial pressures, particularly rising energy and utility costs, continue to weigh heavily on UK households. A concerning 35% of potentially vulnerable consumers anticipate reducing or stopping heating and hot water usage in 2025 due to financial strain. In addition to financial concerns (21%), many consumers feel uncomfortable discussing other key drivers of vulnerability, such as mental health (34%) and relationship breakdowns (28%), with customer service agents.

Rushworth continued, “With financial pressures impacting consumers across all demographics, UK organisations – especially energy providers – must adopt AI-powered solutions that subtly build customer confidence, such as self-service to help consumers easily find critical information when in need. AI-powered guidance during interactions ensures agents provide accurate, empathetic support in real time. Automation can ensure compliance and events that include vulnerability appropriately routed into the correct processes.”

Digital customer service channels vital for vulnerable consumers

Vulnerable consumers are increasingly reliant on digital channels for support. Over a third (37%) prefer organisations to invest in better digital services like AI-powered chatbots over traditional in-person services like brick-and-mortar branches, surpassing the general population’s demand (33%).

Bassett highlighted, “The anonymity offered by digital channels can be especially empowering for vulnerable individuals who may feel uncomfortable discussing sensitive issues face-to-face. This presents a significant opportunity for UK organisations to leverage AI-powered chatbots and virtual agents to help vulnerable customers resolve their issues quickly and accurately. However, caution is essential.”

“These solutions must be able to detect subtle vulnerability cues and respond appropriately, seamlessly escalate to a human agent or the correct workflow with full context preserved. These insights should be used alongside data from voice channels to enhance agent training and support.”

AI and automation: Empowering businesses to support vulnerable customers

Bassett concluded, “Addressing consumer vulnerability in the UK requires a unified approach that integrates comprehensive detection across all interactions with smarter, more impactful digital experiences while ensuring compliance. NICE’s AI-powered customer service automation platform enables organisations to objectively analyse vulnerability at scale through purpose-built models, identifying it even when consumers are unaware or reluctant to share their circumstances.

“By automating next steps, businesses can quickly connect vulnerable customers to the right resources, teams, or processes, ensuring no one is overlooked. AI-driven hyper-personalisation also empowers organisations to deliver tailored services, offers and support, providing truly meaningful assistance. Embracing AI and automation helps businesses not only comply with regulations like the Consumer Duty but also foster stronger, more trusting relationships with customers across their preferred channels.”