Consumer Vulnerability in Financial Product Innovation: An Ethics of Care Perspective

Abstract

Innovation plays a significant role in improving economic and societal outcomes. However, its benefits are often undermined by a failure to adequately consider evolving consumer needs and the multifaceted nature of consumer vulnerability, raising ethical concerns. While product innovation generally targets consumer interests, service providers, including those in essential sectors such as finance, often rely on standardised consumer profiles that overlook the complexities of consumers' lived circumstances. Addressing this gap requires a deeper understanding of how financial product innovation engages with consumer vulnerability and the conditions under which it may lead to harmful outcomes. To explore this, we conduct a systematic literature review (SLR) examining how product innovation is discussed in relation to ethics and consumer vulnerability in the financial sector. Adopting the ethics of care framework as an analytical lens, we examine the intersection of ethics and consumer vulnerability in financial product innovation. Our findings suggest that institutions adopt various approaches to ethical (financial) product innovation, with varying degrees of attentiveness to consumer needs and vulnerability, responsibility, inclusivity, partnership and collaboration. By applying the ethics of care lens, this SLR contributes to a more nuanced understanding of the relationship between (financial) product innovation and consumer vulnerability, highlighting tensions and gaps in how innovation processes address consumer needs and identifying directions for future research.