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Customer Service Expectations in Financial Services - UK - May 2010

  • The growth of financial forums mean that a relatively small number of people are having a major impact on brands' reputation for customer service. Just 4% of those who have been let down by a financial firm say they went online to complain about it, but their complaints can now reach a huge audience.
  • Predictably, people are strongly opposed to overseas call centres. But it's not just the language that causes problems. Focus groups suggest that overseas workers simply don't have a good enough grasp of the UK's financial system, and struggle with non-standard requests.
  • Younger and less affluent people tend to be more irritated by problems with branch-based service - long queues, for example. The upper end of the market, though, is less bothered by that, and more annoyed by constant attempts to cross-sell.
  • While it's easy to focus on the negatives, most people are relatively content - less than a quarter of them say that they've been let down by a financial service institution in the last few years.
  • Satisfaction tends to be closely tied to experience. Banks are the most likely to be trusted to offer good customer service.
  • Mintel's research showed that across the sample as a whole insurers were among the least likely to be trusted to offer good service. However, focus groups showed that among those who had actually claimed, the experience was often extremely positive. The public perception of how insurers behave is at odds with the reality of the situation.

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Table of contents

  1. Issues in the Market

      • Abbrevations
        • Focus group methodology
        • Future Opportunities

          • Updating service expectations in a connected world?
            • Handing control to the customer
            • Market in Brief

              • Only a minority have been let down by a financial services firm
                • Figure 1: Proportion of people who feel they have been let down or treated unfairly by financial service firms over the last few years, February 2010
              • What do people do when they have been let down by their bank?
                • Figure 2: Action taken by people who feel they have been let down or treated unfairly by financial services firms, February 2010
              • Telephones – a major cause of service shortfalls
                • Figure 3: Top three annoyances when dealing with banks and other financial services institution, February 2010
              • The sales drive
                • The interplay of perceptions and experience
                  • Recognising when firms do a good job
                  • Regulation and Customer Service

                    • Key points
                      • Regulatory efforts putting the customer first
                        • Ombudsman cases leap upwards…
                          • Figure 4: Complaints made to the Financial Ombudsman Service, 2006/07-2009/10
                        • …as the recession starts to bite…
                          • …and consumers increase their expectations
                            • FSF takes action over poor complaint handling
                              • Naming and shaming the worst offenders
                              • The Impact of the Internet

                                • Key points
                                  • The great migration
                                    • Figure 5: Preferred channels for banking services, June 2009
                                  • Key focus group findings
                                    • A way to avoid customer service frustrations
                                      • Expansion of the feedback network…
                                        • …but a degree of cynicism
                                          • Looking for the consensus
                                            • A vocal minority?
                                              • Harder to excel – but harder to get things wrong
                                                • Spreading the news – the impact of financial forums…
                                                  • …and their limitations
                                                  • The Call Centre Issue

                                                    • Key points
                                                      • Research highlights
                                                        • Language
                                                          • Understanding
                                                            • Problem solving
                                                              • Respect and courtesy
                                                                • Telephone services – potentially a major cause of irritation…
                                                                  • Figure 6: Top three annoyances when dealing with banks and other financial services institution, February 2010
                                                                • …and overseas call centres provoke the most discussion
                                                                  • “Stuff the customers and their needs!”
                                                                    • Is it only financial services?
                                                                      • It is not just overseas call centres that cause problems…
                                                                        • …and there is cynicism over who is and is not overseas
                                                                        • Consumers’ Reaction to Poor Service

                                                                          • Key points
                                                                            • Research highlights
                                                                              • Only a minority feel they have been let down by a financial services firm
                                                                                • Many complaints will never be heard by the firm in question
                                                                                  • The internet – giving a voice to a dissatisfied minority
                                                                                    • Switching still a rarity
                                                                                      • A quarter have been let down
                                                                                          • Figure 7: Proportion of people who feel they have been let down or treated unfairly by financial service firms over the last few years, February 2010
                                                                                        • Do you complain to the bank? Or to your friends?
                                                                                            • Figure 8: Action taken by people who feel they have been let down or treated unfairly by financial services firms, February 2010
                                                                                          • The quiet complainers
                                                                                            • An opportunity to prove your service credentials
                                                                                              • So why not switch?
                                                                                                • There is apathy – but there is also an emotional bond
                                                                                                  • Not switching – but choosing
                                                                                                    • Who takes action – and who suffers in silence?
                                                                                                        • Figure 9: Consumers’ reaction to being let down by a financial services provider, by gender, age, lifestage and socio-economic group, February 2010
                                                                                                      • Broadsheet readers – hard-done-by, or just picky?
                                                                                                          • Figure 10: Consumers’ reaction to being let down by a financial services provider, by newspaper readership, February 2010
                                                                                                        • Only a few ‘multi-complainers’
                                                                                                            • Figure 11: Number of actions taken by people who feel that they have been let down or treated unfairly by financial service firms over the last few years, February 2010
                                                                                                          • Not just complaining – but also switching
                                                                                                            • Figure 12: Actions taken by disappointed customers, by the number of actions taken, February 2010
                                                                                                          • Problems at both extremes of financial sophistication
                                                                                                            • Figure 13: Actions taken by disappointed customers, by financial product ownership, February 2010
                                                                                                        • Most Trusted Financial Services Institutions

                                                                                                          • Key points
                                                                                                            • Research highlights
                                                                                                              • The high street still offers some prestige
                                                                                                                • Insurers – great if you have had to claim, terrible if you have not
                                                                                                                  • Qualified approval for new entrants
                                                                                                                    • Small is beautiful
                                                                                                                      • Banks lead the way when it comes to service expectations
                                                                                                                        • Figure 14: Types of financial services firm trusted to offer high standards of customer services, February 2010
                                                                                                                      • IFAs letting their target market down?
                                                                                                                        • Insurers struggle to build a reputation for good service
                                                                                                                          • Perception matters as much as experience…
                                                                                                                            • …and this can hit the banks as much as it hits other firms
                                                                                                                              • Traditional values come into play for older customers
                                                                                                                                • Further evidence of the importance of personal experience
                                                                                                                                  • Figure 15: Types of financial services firm trust to offer high standards of customer services, by repertoire of ownership of financial products, February 2010
                                                                                                                                • Supermarkets and service
                                                                                                                                  • Steering clear of the sharks…
                                                                                                                                    • …but can service beat expertise?
                                                                                                                                      • Service can tempt people to buy – but it is product-specific
                                                                                                                                        • A little knowledge is a dangerous thing
                                                                                                                                          • Small is beautiful
                                                                                                                                          • Customer Service Irritations

                                                                                                                                            • Key points
                                                                                                                                              • Research highlights
                                                                                                                                                • Cross-selling – good for profits, bad for customer service
                                                                                                                                                  • Branch staff being let down by procedure?
                                                                                                                                                    • Bringing the personal touch back
                                                                                                                                                      • Call centres and automation the main irritations…
                                                                                                                                                        • Figure 16: Top three annoyances when dealing with banks and other financial services institution, February 2010
                                                                                                                                                      • …but they are not the only ones
                                                                                                                                                        • Dodging the irritations
                                                                                                                                                          • Is it a training issue?
                                                                                                                                                            • Flexibility, and the importance of getting the right answer
                                                                                                                                                              • The impact of branch service on customer satisfaction
                                                                                                                                                                • Staff being let down by their employer?
                                                                                                                                                                  • The curse of the sales culture…
                                                                                                                                                                    • …and a perception that training is about sales, not service
                                                                                                                                                                      • They are only there in the good times
                                                                                                                                                                        • Who do they work for?
                                                                                                                                                                          • Talk to me – do not sell to me
                                                                                                                                                                            • Figure 17: Top three annoyances when dealing with banks and other financial services institution, by total value of investible assets, February 2010
                                                                                                                                                                          • Queues in branches – a problem for tomorrow’s key customers?
                                                                                                                                                                              • Figure 18: Top three annoyances when dealing with banks and other financial services institutions, by repertoire of ownership of financial products, February 2010
                                                                                                                                                                          • Attitudes Towards Customer Service

                                                                                                                                                                            • Key points
                                                                                                                                                                              • Research highlights
                                                                                                                                                                                • Service is product-specific
                                                                                                                                                                                  • Service is product-specific
                                                                                                                                                                                    • Attracting premium customers with superior service
                                                                                                                                                                                      • Important to keep complaints in perspective
                                                                                                                                                                                        • It is easy to overstate the negatives
                                                                                                                                                                                          • Figure 19: Statements agreed on customer service and financial services firms, February 2010
                                                                                                                                                                                        • They are all the same – or are they?
                                                                                                                                                                                          • A process of trial and error…
                                                                                                                                                                                            • …which is why word of mouth counts
                                                                                                                                                                                              • Where do financial services firms rank?
                                                                                                                                                                                                • Poor service – but the right price
                                                                                                                                                                                                  • The importance of service depends on the product
                                                                                                                                                                                                    • A willingness to pay more among the better-off…
                                                                                                                                                                                                      • Figure 20: Statements agreed on customer service and financial services firms, by repertoire of ownership of financial products, February 2010
                                                                                                                                                                                                    • …but the better-off are also more likely to bypass staff altogether
                                                                                                                                                                                                      • Figure 21: Statements agreed on customer service and financial services firms, by total value of investible assets, February 2010
                                                                                                                                                                                                  • Key Consumer Groups

                                                                                                                                                                                                    • Key points
                                                                                                                                                                                                      • Branch Hassles? Or Call Centre Complainers?
                                                                                                                                                                                                          • Figure 22: Top three annoyances when dealing with banks and other financial services institutions, by target groups, February 2010
                                                                                                                                                                                                        • Just get the job done
                                                                                                                                                                                                          • Call Centre Complaints spill over into action
                                                                                                                                                                                                              • Figure 23: Let down or treated unfairly by financial service firms over the last few years, by target groups, February 2010
                                                                                                                                                                                                            • Different firms for different attitudes?
                                                                                                                                                                                                              • Figure 24: Types of financial services firm trust to offer high standards of customer services, by target groups, February 2010
                                                                                                                                                                                                            • A belief in personal relationships
                                                                                                                                                                                                                • Figure 25: Statements agreed on customer service and financial services firms, by target groups, February 2010
                                                                                                                                                                                                            • Appendix – Consumers’ Reaction to Poor Service

                                                                                                                                                                                                                • Figure 26: Most popular let down or treated unfairly by financial service firms over the last few years, by demographics, February 2010
                                                                                                                                                                                                                • Figure 27: Next most popular let down or treated unfairly by financial service firms over the last few years, by demographics, February 2010 (continued)
                                                                                                                                                                                                                • Figure 28: Repertoire of actions taken by people who have been let down or treated unfairly by financial service firms over the last few years, by demographics, February 2010
                                                                                                                                                                                                            • Appendix – Most Trusted Financial Services Institutions

                                                                                                                                                                                                                • Figure 29: Financial services firms most commonly trusted to offer high standards of customer services, by demographics, February 2010
                                                                                                                                                                                                                • Figure 30: Next most commonly-trusted types of financial services firm to offer high standards of customer services, by demographics, February 2010 (continued)
                                                                                                                                                                                                            • Appendix – Customer Service Irritations

                                                                                                                                                                                                                • Figure 31: Most common annoyances when dealing with banks and other financial services institutions, by demographics, February 2010
                                                                                                                                                                                                                • Figure 32: Next most common annoyances when dealing with banks and other financial services institution, by demographics, February 2010(continued)
                                                                                                                                                                                                            • Appendix – Attitudes Towards Customer Service

                                                                                                                                                                                                                • Figure 33: Most popular statements agreed on customer service and financial services firms, by demographics, February 2010
                                                                                                                                                                                                                • Figure 34: Next most popular statements agreed on customer service and financial services firms, by demographics, February 2010 (continued)
                                                                                                                                                                                                            • Appendix – Key Consumer Groups

                                                                                                                                                                                                                • Figure 35: Target groups, by demographics, February 2010

                                                                                                                                                                                                            Companies Covered

                                                                                                                                                                                                            • Asda Group Ltd
                                                                                                                                                                                                            • Co-operative Group
                                                                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                                                                            • Financial Ombudsman Service
                                                                                                                                                                                                            • Financial Services Authority (The)
                                                                                                                                                                                                            • First Direct
                                                                                                                                                                                                            • Google UK
                                                                                                                                                                                                            • HSBC Private Bank (UK) Limited
                                                                                                                                                                                                            • ING Direct
                                                                                                                                                                                                            • J. Sainsbury
                                                                                                                                                                                                            • Marks & Spencer
                                                                                                                                                                                                            • Metro Bank
                                                                                                                                                                                                            • Microsoft Ltd (UK)
                                                                                                                                                                                                            • Nationwide Building Society
                                                                                                                                                                                                            • Twitter, Inc.
                                                                                                                                                                                                            • Virgin Media Ltd
                                                                                                                                                                                                            • Waitrose
                                                                                                                                                                                                            • Wm Morrison Supermarkets

                                                                                                                                                                                                            Customer Service Expectations in Financial Services - UK - May 2010

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