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The Role of Trust in Financial Services - UK - November 2012

“Mintel’s research for this report shows that people are perfectly prepared to bank with an organisation that they don’t trust to treat them fairly. Marketers would be forgiven for asking whether this more emotional element of trust actually matters. Should they just give up on making people like them, and instead just concentrate on making sure that the bank gets the basics right?”

– Toby Clark, Director of Research, EMEA

Some questions answered in this report include:

  • What does “trust” mean?
  • Is there a generation gap when it comes to trust in the financial services industry?
  • What impact does mis-selling have on levels of trust?
  • Does trust even matter in today’s market?
  • What impact does a high street network have on consumer trust?

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Table of contents

  1. Introduction

    • Executive Summary

        • Trust across different industry sectors
          • It’s easier for smaller businesses to build trust
            • Figure 1: Extent to which consumers trust companies to treat them fairly, August 2012
          • Sizeable gap in trust between banks, insurers and investment firms
            • People don’t always trust “banks”, but they do trust “my bank”
              • Figure 2: Trust in different aspects of the banking industry, August 2012
            • Understanding what trust means
              • People trust that their bank is financially secure…
                • Figure 3: Investigating different elements of trust, August 2012
              • …and NatWest customers show that people are prepared to forgive mistakes
                • Trust in the ‘softer’ elements of banking is much less robust
                  • Figure 4: Trust in bank and building society staff, August 2012
                • The impact of bad publicity on consumer trust
                  • High awareness of past financial scandals…
                    • …but the level of concern varies widely
                      • Figure 5: Concern over various elements of the financial services industry, August 2012
                    • Building societies and trust
                      • Most people appreciate there is a difference between banks and building societies…
                        • …and the building societies are seen as being much more trustworthy
                          • Figure 6: Opinion on the relative qualities of banks and building societies, August 2012
                        • What we think
                        • Issues in the Market

                            • What does “trust” mean?
                              • Is there a difference between “banks” and “my bank”
                                • Is there a generation gap when it comes to trust in the financial services industry?
                                  • What impact does mis-selling have on levels of trust?
                                    • Does trust even matter in today’s market?
                                      • What impact does a high street network have on consumer trust?
                                      • Trend Application

                                        • Carnivore, Herbivore... Locavore
                                          • Moral Brands
                                            • 2015 trend: Old Gold
                                            • Putting the Financial Services Industry in Context

                                              • Key points
                                                • Small is beautiful?
                                                  • Figure 7: Extent to which consumers trust companies to treat them fairly, August 2012
                                                • Naming the high achievers
                                                  • Amazon proves it’s possible to trust someone you’ve never met
                                                    • Not as bad as the banks might have expected…
                                                      • Figure 8: Extent to which consumers trust companies to treat them fairly, August 2012
                                                    • …but insurers and investment firms are viewed with deep suspicion
                                                      • A lack of trust undermines the core appeal of insurance
                                                        • The impact of the financial crisis on trust…
                                                          • …and on the perception of competence
                                                            • The impact of age on trust
                                                              • People who are struggling are the least likely to trust the industry
                                                              • Trust in Different Elements of the Banking Industry

                                                                • Key points
                                                                  • ‘The financial services industry’ isn’t a homogenous whole
                                                                    • Figure 9: Trust in different aspects of the banking industry, August 2012
                                                                  • The closer you are, the more faith you have
                                                                    • Building trust through a high street presence
                                                                      • The split between ‘banks’ and ‘my bank’ comes to the fore again
                                                                        • Figure 10: Trust in different aspects of the banking industry, August 2012
                                                                      • ‘A fish rots from the head down’…
                                                                        • …but people don’t trust the regulators any more than the bankers
                                                                          • Older people’s trust is based on branch staff
                                                                            • Figure 11: Proportion who trust different elements of the banking industry, by age, August 2012
                                                                          • Further evidence that banks aren’t supporting struggling customers
                                                                            • Figure 12: Proportion who trust different elements of the banking industry, by income and financial situation, August 2012
                                                                        • What Does ‘Trust’ Mean?

                                                                          • Key points
                                                                            • Very few worry about the financial stability of their bank…
                                                                              • Figure 13: Investigating different elements of trust, August 2012
                                                                            • …and almost all trust their bank to get the basics right…
                                                                              • …but three in ten aren’t sure they can rely on their bank to treat them fairly
                                                                                • Nationwide strong on trust…
                                                                                  • Figure 14: Investigating different elements of trust, by main bank account provider, August 2012
                                                                                • …while NatWest shows that people will forgive occasional lapses
                                                                                • Trust in Branch Staff

                                                                                  • Key points
                                                                                    • Branch staff – the acceptable face of the financial services industry?
                                                                                      • Figure 15: Trust in bank and building society staff, August 2012
                                                                                    • Trust drops when it comes to advice and customer-centricity
                                                                                      • Trust spans different social and economic groups
                                                                                      • Awareness and Understanding of Industry Failings

                                                                                        • Key points
                                                                                          • Widespread awareness of industry issues…
                                                                                              • Figure 16: Awareness of complaints about financial services industry practices, August 2012
                                                                                            • …even if they’re not totally sure about the details
                                                                                              • It’s pay, not ‘casino banking’ that really grates
                                                                                                • Is ‘the current economic crisis’ the banks’ biggest failing?
                                                                                                  • But it’s not all bad
                                                                                                  • Level of Concern Over Industry Failings

                                                                                                    • Key points
                                                                                                      • Excessive bank charges are the greatest concern…
                                                                                                        • Figure 17: Concern over various elements of the financial services industry, August 2012
                                                                                                      • …but people do still pay attention to more abstract issues
                                                                                                        • Mis-selling and the concept of caveat emptor
                                                                                                        • Do People Differentiate Between Banks and Mutuals?

                                                                                                          • Key points
                                                                                                            • Two thirds appreciate the difference between building societies and banks…
                                                                                                              • Figure 18: Awareness of the difference between banks and building societies, August 2012
                                                                                                            • …but the level of understanding varies widely
                                                                                                              • The legacy of demutualisation leaves some consumers confused
                                                                                                                • Older people much more aware of the difference between banks and building societies
                                                                                                                  • Figure 19: Awareness of the difference between banks and building societies, by age, August 2012
                                                                                                              • Mutuals and Banks – The Trust Gap

                                                                                                                • Key points
                                                                                                                  • Charting the difference between banks and building societies
                                                                                                                      • Figure 20: Opinion on the relative qualities of banks and building societies, August 2012
                                                                                                                    • Among those who care, building societies do have the edge on trust…
                                                                                                                      • …but most people simply don’t see a difference
                                                                                                                          • Figure 21: Opinion on the relative qualities of banks and building societies, August 2012
                                                                                                                        • Younger people have greater faith in the banks
                                                                                                                        • Does Trust Even Matter?

                                                                                                                          • Key points
                                                                                                                            • Is trust a luxury or a necessity?
                                                                                                                              • The link between trust and customer satisfaction
                                                                                                                                • Figure 22: Key driver analysis of current account satisfaction, November 2012
                                                                                                                              • You can bank with an organisation you don’t trust – but you won’t be happy
                                                                                                                                • It’s the ability to say ‘sorry’ that really matters
                                                                                                                                  • Figure 23: Key driver analysis of current account satisfaction, November 2012
                                                                                                                                • How does satisfaction differ from switching intentions?
                                                                                                                                  • Figure 24: Key driver analysis of current account switching intentions, November 2012
                                                                                                                                  • Figure 25: Key driver analysis of current account switching intentions, November 2012
                                                                                                                                • Family…location…choosing a bank isn’t always about the bank
                                                                                                                                  • Key driver methodology
                                                                                                                                  • Appendix – Putting the Financial Services Industry in Context

                                                                                                                                      • Figure 26: Extent to which consumers trust local shops to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 27: Extent to which consumers trust supermarkets to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 28: Extent to which consumers trust building societies to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 29: Extent to which consumers trust banks to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 30: Extent to which consumers trust solicitors to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 31: Extent to which consumers trust travel companies to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 32: Extent to which consumers trust mobile phone companies to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 33: Extent to which consumers trust utility firms (electricity suppliers, gas suppliers etc) to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 34: Extent to which consumers trust insurers to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 35: Extent to which consumers trust mortgage lenders to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 36: Extent to which consumers trust investment firms to treat them fairly, by demographics, August 2012
                                                                                                                                      • Figure 37: Extent to which consumers trust estate agents to treat them fairly, by demographics, August 2012
                                                                                                                                  • Appendix – Trust in Different Elements of the Banking Sector

                                                                                                                                      • Figure 38: Trust in staff at my local bank/building society, by demographics, August 2012
                                                                                                                                      • Figure 39: Trust in call centre staff of the banking industry, by demographics, August 2012
                                                                                                                                      • Figure 40: Trust in main bank/building society’s corporate culture and values of the banking industry, by demographics, August 2012
                                                                                                                                      • Figure 41: Trust in senior executives in the financial services industry of the banking industry, by demographics, August 2012
                                                                                                                                      • Figure 42: Trust in the way in which the financial services sector in general operates, by demographics, August 2012
                                                                                                                                      • Figure 43: Trust in the way in which the financial services sector in general is governed, by demographics, August 2012
                                                                                                                                  • Appendix – What Does ‘Trust’ Mean?

                                                                                                                                      • Figure 44: Agreement with the statements ‘I trust that my bank will still be in business a year from now’ and ‘I trust my bank to handle my day-to-day banking requirements (paying direct debits, running internet banking services, processing debit card payments etc)’, by demographics, August 2012
                                                                                                                                      • Figure 45: Agreement with the statement ‘I trust my bank to give me a fair deal’, by demographics, August 2012
                                                                                                                                  • Appendix – Trust in Branch Staff

                                                                                                                                      • Figure 46: Trust in bank and building society staff being able to get the basics right (processing transactions, answering simple account queries, etc), by demographics, August 2012
                                                                                                                                      • Figure 47: Trust in bank and building society staff and their knowledge of the products offered by the bank/building society, by demographics, August 2012
                                                                                                                                      • Figure 48: Trust in bank and building society staff being able to resolve problems that you have encountered, by demographics, August 2012
                                                                                                                                      • Figure 49: Trust in bank and building society staff and their ability to give me relevant and useful advice on my financial requirements, by demographics, August 2012
                                                                                                                                      • Figure 50: Trust in bank and building society staff and their willingness to do what’s right for me, not what’s right for the bank, by demographics, August 2012
                                                                                                                                      • Figure 51: Trust in bank and building society staff, by demographics, August 2012
                                                                                                                                  • Appendix – Awareness and Understanding of Industry Failings

                                                                                                                                      • Figure 52: Awareness of complaints about payment protection insurance mis-selling, by demographics, August 2012
                                                                                                                                      • Figure 53: Awareness of complaints about excessive pay structure/bonuses in the banking sector, by demographics, August 2012
                                                                                                                                      • Figure 54: Awareness of complaints about problems with processing payments at RBS/NatWest, by demographics, August 2012
                                                                                                                                      • Figure 55: Awareness of complaints about excessive bank charges, by demographics, August 2012
                                                                                                                                      • Figure 56: Awareness of complaints about LIBOR fixing, by demographics, August 2012
                                                                                                                                      • Figure 57: Awareness of complaints about mis-selling of investment products, by demographics, August 2012
                                                                                                                                      • Figure 58: Awareness of complaints about mis-selling of pension products, by demographics, August 2012
                                                                                                                                      • Figure 59: Awareness of complaints about mis-selling of interest rate swaps for small businesses, by demographics, August 2012
                                                                                                                                      • Figure 60: Awareness of complaints about banks’ involvement in ‘casino banking’, by demographics, August 2012
                                                                                                                                  • Appendix – Level of Concern Over Industry Failings

                                                                                                                                      • Figure 61: Most popular concern over various elements of the financial services industry, by demographics, August 2012
                                                                                                                                      • Figure 62: Next most popular concern over various elements of the financial services industry, by demographics, August 2012
                                                                                                                                  • Appendix – Do People Differentiate Between Banks and Mutuals?

                                                                                                                                      • Figure 63: Awareness of the difference between banks and building societies, by demographics, August 2012
                                                                                                                                  • Appendix – Mutuals and Banks – The Trust Gap

                                                                                                                                      • Figure 64: Opinion on offering the best rates between banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 65: Opinion on the trustworthiness of banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 66: Opinion on showing a strong sense of morality of banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 67: Opinion on the customer service of banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 68: Opinion on the financial strength/stability of banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 69: Opinion on supporting the UK economy of banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 70: Opinion on offering innovative new ways to bank by banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 71: Opinion on offering the widest range of products by banks and building societies, by demographics, August 2012
                                                                                                                                      • Figure 72: Opinion on the convenience of banks and building societies, by demographics, August 2012

                                                                                                                                  Companies Covered

                                                                                                                                  To learn more about the companies covered in this report please contact us.

                                                                                                                                  The Role of Trust in Financial Services - UK - November 2012

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