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The Role of Trust in Financial Services - UK - September 2014

“Greater consumer interaction with financial services firms can slowly build trust, while negative media coverage and word of mouth on the industry’s failings have the power to destroy this trust almost immediately. While companies need to find ways to engage more effectively with their customers, they also face the challenge of dealing with the impact that bad customer experiences can have on their reputation and consumer trust.”
– Chryso Kolakkides, Senior Financial Services Analyst

This report looks at the following areas:

  • The generation gap in the financial services industry
  • Greater interaction builds trust
  • Consumers protest against introductory offers

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Table of contents

  1. Introduction

      • Abbreviations
      • Executive Summary

          • Putting the financial services industry in context
            • Discouraging results for the financial services industry…
              • Figure 1: Extent to which consumers trust companies to treat them fairly, June 2014
            • …but it’s not all bad news
              • Scale and proximity matter
                • Trust in different elements of the banking industry
                  • The closer you are, the more faith you have
                    • Figure 2: Trust in different elements of the banking industry, June 2014
                  • Investigating different concepts of ‘trust’
                    • Few actively worry about the financial stability of their bank…
                      • Figure 3: Investigating different concepts of trust, June 2014
                    • …as well as fraud and online systems’ insecurity
                      • Nearly two thirds trust their bank to get the basics right…
                        • …but only two in five trust their bank to have their best interest at heart
                          • Level of concern over the industry’s failings
                            • Bad publicity impacts consumer trust
                              • Figure 4: Consumer concerns over various issues in the financial services industry, June 2014
                            • Effect of customer experiences on trust
                              • Interaction with the industry seems to generally increase trust
                                • Attitudes towards the financial services industry
                                  • The issue of bankers’ pay strikes a chord with consumers
                                    • Figure 5: Attitudes towards the financial services industry, June 2014
                                  • Consumers would like to see harsher punishment for financial misconduct
                                    • Nearly 60% are unsure of whether they trust existing financial providers more than new entrants
                                      • What we think
                                      • Issues and Insights

                                          • The generation gap in the financial services industry
                                            • The facts
                                              • The implications
                                                • Greater interaction builds trust
                                                  • The facts
                                                    • The implications
                                                      • Consumers protest against introductory offers
                                                        • The facts
                                                          • The implications
                                                          • Trend Application

                                                            • Life Hacking
                                                              • Decline of Deference
                                                                • Mintel futures: Brand Intervention
                                                                • Putting the Financial Services Industry in Context

                                                                  • Key points
                                                                    • Survey background
                                                                      • Discouraging results for the financial services industry …
                                                                        • Figure 6: Extent to which consumers trust companies to treat them fairly, June 2014
                                                                      • …but it’s not all bad news
                                                                        • Figure 7: Extent to which consumers trust companies to treat them fairly, June 2014
                                                                      • Scale and proximity matter…
                                                                        • …but not all big companies are the same
                                                                          • Mintel research shows that you don’t need a high street presence to be trusted
                                                                            • Good customer service still goes a long way
                                                                              • Young people are more likely to trust financial services…
                                                                                • Figure 8: Proportion of consumers who somewhat/strongly trust companies to treat them fairly, by age, June 2014
                                                                              • …while people who are struggling financially are the least trusting
                                                                                • Figure 9: Proportion of consumers who somewhat/strongly trust companies to treat them fairly, by current financial situation, June 2014
                                                                            • Trust in Different Elements of the Banking Industry

                                                                              • Key points
                                                                                • The financial services industry is not a homogenous whole
                                                                                  • Figure 10: Trust in different elements of the banking industry, June 2014
                                                                                • Proximity builds trust
                                                                                  • Trust in call centre staff seems variable
                                                                                    • Figure 11: Trust in different aspects of the banking industry, June 2014
                                                                                  • Trust of the over-65s is strongly based on branch staff...
                                                                                    • Figure 12: Trust in different aspects of the banking industry, by age, June 2014
                                                                                  • …while under-35s are likely to be more trusting of the regulators
                                                                                    • The impact of the financial crisis on trust
                                                                                      • Figure 13: Trust in different aspects of the banking industry, by impact of the economic downturn on consumers, June 2014
                                                                                  • Investigating Different Concepts of ‘Trust’

                                                                                    • Key points
                                                                                      • ‘Trust’ can refer to different concepts
                                                                                        • Figure 14: Investigating different concepts of trust, June 2014
                                                                                      • Few actively worry about the financial stability of their bank
                                                                                        • The majority trust their bank to protect them against fraud and keep their personal data safe
                                                                                          • Technology can be a double-edged sword
                                                                                            • Nearly two thirds trust their bank to get the basics right…
                                                                                              • …while only two in five trust their bank to have their best interest at heart
                                                                                                • Nationwide customers more likely to feel their bank will act in their best interests
                                                                                                  • Figure 15: Investigating different concepts of trust, by selected main bank account providers, June 2014
                                                                                              • Level of Concern over the Industry’s Failings

                                                                                                • Key points
                                                                                                  • Excessive bank charges cause the greatest concern…
                                                                                                    • Figure 16: Consumer concerns over various issues in the financial services industry, June 2014
                                                                                                  • …followed by the concern of theft or loss of personal data
                                                                                                    • One in three are concerned over poor governance
                                                                                                      • Mis-selling of PPI and other financial products still causes frustration
                                                                                                        • Branch closures are a concern despite the rise of digital banking
                                                                                                          • System failures are not far from people’s minds
                                                                                                            • Media coverage on payday lenders is affecting the whole industry’s reputation
                                                                                                              • The feeling of having no other choice but to trust prevails
                                                                                                              • Effect of Customer Experiences on Trust

                                                                                                                • Key points
                                                                                                                  • How much do customer experiences affect trust in the industry?
                                                                                                                    • Figure 17: Consumer experiences with financial services, June 2014
                                                                                                                  • Interaction with the industry seems to generally increase trust
                                                                                                                    • Figure 18: Extent to which consumers trust financial services companies to treat them fairly, by consumer experiences, June 2014
                                                                                                                  • Consumers affected by IT system failures are generally more distrustful
                                                                                                                    • Figure 19: Investigating different concepts of trust, by consumer experiences, June 2014
                                                                                                                  • Victims of banking fraud are more likely to trust their bank to get the basics right
                                                                                                                      • Figure 20: Consumer concerns over various issues in the financial services industry, by consumer experiences, June 2014
                                                                                                                    • More than 50% of people who have received financial advice from their bank trust it to have their best interest at heart
                                                                                                                    • Attitudes towards the Financial Services Industry

                                                                                                                      • Key points
                                                                                                                        • The issue of bankers’ pay strikes a chord with consumers
                                                                                                                          • Figure 21: Attitudes towards the financial services industry, June 2014
                                                                                                                        • Consumers would like to see harsher punishment for financial misconduct
                                                                                                                            • Figure 22: Attitudes towards the financial services industry, by age, June 2014
                                                                                                                          • Consumers continue to believe that retail banking should be ring-fenced
                                                                                                                            • Nearly three fifths consider bank charges unclear
                                                                                                                              • Nearly 60% are unsure of whether they trust existing financial providers more than new entrants
                                                                                                                              • Appendix – Putting the Financial Services Industry in Context

                                                                                                                                  • Figure 23: Extent to which consumers trust companies to treat them fairly – Local shops, by demographics, June 2014
                                                                                                                                  • Figure 24: Extent to which consumers trust companies to treat them fairly – Supermarkets, by demographics, June 2014
                                                                                                                                  • Figure 25: Extent to which consumers trust companies to treat them fairly – Building societies, by demographics, June 2014
                                                                                                                                  • Figure 26: Extent to which consumers trust companies to treat them fairly – Travel companies, by demographics, June 2014
                                                                                                                                  • Figure 27: Extent to which consumers trust companies to treat them fairly – Banks, by demographics, June 2014
                                                                                                                                  • Figure 28: Extent to which consumers trust companies to treat them fairly – Solicitors, by demographics, June 2014
                                                                                                                                  • Figure 29: Extent to which consumers trust companies to treat them fairly – Mobile phone companies, by demographics, June 2014
                                                                                                                                  • Figure 30: Extent to which consumers trust companies to treat them fairly – Financial advisers, by demographics, June 2014
                                                                                                                                  • Figure 31: Extent to which consumers trust companies to treat them fairly – Insurers, by demographics, June 2014
                                                                                                                                  • Figure 32: Extent to which consumers trust companies to treat them fairly – Utility firms, by demographics, June 2014
                                                                                                                                  • Figure 33: Extent to which consumers trust companies to treat them fairly – Mortgage lenders, by demographics, June 2014
                                                                                                                                  • Figure 34: Extent to which consumers trust companies to treat them fairly – Investment firms, by demographics, June 2014
                                                                                                                                  • Figure 35: Extent to which consumers trust companies to treat them fairly – Estate agents, by demographics, June 2014
                                                                                                                              • Appendix – Trust in Different Elements of the Banking Industry

                                                                                                                                  • Figure 36: Trust in different elements of the banking industry – Staff at my local bank/building society branch, by demographics, June 2014
                                                                                                                                  • Figure 37: Trust in different elements of the banking industry – Call centre staff of my main bank/building society, by demographics, June 2014
                                                                                                                                  • Figure 38: Trust in different elements of the banking industry – My main bank/building society’s corporate culture and values, by demographics, June 2014
                                                                                                                                  • Figure 39: Trust in different elements of the banking industry – The people responsible for regulating the banking industry, by demographics, June 2014
                                                                                                                                  • Figure 40: Trust in different elements of the banking industry – Senior executives of my bank/building society, by demographics, June 2014
                                                                                                                                  • Figure 41: Trust in different elements of the banking industry – The way in which the overall banking industry operates, by demographics, June 2014
                                                                                                                              • Appendix – Investigating Different Concepts of ‘Trust’

                                                                                                                                  • Figure 42: Agreement with the statement ‘I trust that my bank will still be in business five years from now’, by demographics, June 2014
                                                                                                                                  • Figure 43: Agreement with the statement ‘I trust my bank to protect me against fraud’, by demographics, June 2014
                                                                                                                                  • Figure 44: Agreement with the statement ‘I trust that my bank’s online banking systems are secure’, by demographics, June 2014
                                                                                                                                  • Figure 45: Agreement with the statement ‘I trust that my bank keeps my personal information secure’, by demographics, June 2014
                                                                                                                                  • Figure 46: Agreement with the statement ‘If mistakes happen, I trust my bank to fix these quickly’, by demographics, June 2014
                                                                                                                                  • Figure 47: Agreement with the statement ‘I trust my bank not to make mistakes with my day-to-day banking transactions’, by demographics, June 2014
                                                                                                                                  • Figure 48: Agreement with the statement ‘I trust my bank to treat me fairly’, by demographics, June 2014
                                                                                                                                  • Figure 49: Agreement with the statement ‘I trust that my bank does not provide third parties with my personal information without my consent’, by demographics, June 2014
                                                                                                                                  • Figure 50: Agreement with the statement ‘I trust my bank to have my best interest at heart’, by demographics, June 2014
                                                                                                                                  • Figure 51: Agreement with the following statements, by current account providers – Main account, June 2014
                                                                                                                                  • Figure 52: Agreement with the following statements, by current account providers – Main account, June 2014 (continued)
                                                                                                                              • Appendix – Level of Concern over the Industry’s Failings

                                                                                                                                  • Figure 53: Consumer concerns over various issues in the financial services industry, by demographics, June 2014
                                                                                                                                  • Figure 54: Consumer concerns over various issues in the financial services industry, by demographics, June 2014
                                                                                                                              • Appendix – Effect of Customer Experiences on Trust

                                                                                                                                  • Figure 55: Agreement with the following statements, by consumer experiences with financial services – Made a claim on an insurance policy, June 2014
                                                                                                                                  • Figure 56: Agreement with the following statements, by consumer experiences with financial services – Applied for a loan or credit card, June 2014
                                                                                                                                  • Figure 57: Agreement with the following statements, by consumer experiences with financial services – Applied for a mortgage, June 2014
                                                                                                                                  • Figure 58: Agreement with the following statements, by consumer experiences with financial services – Got financial advice from my bank, June 2014
                                                                                                                                  • Figure 59: Agreement with the following statements, by consumer experiences with financial services – Got advice from a financial adviser, June 2014
                                                                                                                                  • Figure 60: Agreement with the following statements, by consumer experiences with financial services – Paid bank charges for an overdraft, June 2014
                                                                                                                                  • Figure 61: Agreement with the following statements, by consumer experiences with financial services – Paid charges for late payments, June 2014
                                                                                                                                  • Figure 62: Agreement with the following statements, by consumer experiences with financial services – Switched my main bank/building society, June 2014
                                                                                                                                  • Figure 63: Agreement with the following statements, by consumer experiences with financial services – Switched my car/home insurance provider, June 2014
                                                                                                                                  • Figure 64: Agreement with the following statements, by consumer experiences with financial services – Experienced fraud on a card/bank account, June 2014
                                                                                                                                  • Figure 65: Agreement with the following statements, by consumer experiences with financial services – Lost a debit/credit card or had it stolen, June 2014
                                                                                                                                  • Figure 66: Agreement with the following statements, by consumer experiences with financial services – Struggled to use my payment card or access my online/mobile banking services due to system problems, June 2014
                                                                                                                                  • Figure 67: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Made a claim on an insurance policy, June 2014
                                                                                                                                  • Figure 68: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Applied for a loan or credit card, June 2014
                                                                                                                                  • Figure 69: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Applied for a mortgage, June 2014
                                                                                                                                  • Figure 70: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Got financial advice from my bank, June 2014
                                                                                                                                  • Figure 71: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Got advice from a financial adviser, June 2014
                                                                                                                                  • Figure 72: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Paid bank charges for an overdraft, June 2014
                                                                                                                                  • Figure 73: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Paid charges for late payments, June 2014
                                                                                                                                  • Figure 74: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Switched my main bank/building society, June 2014
                                                                                                                                  • Figure 75: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Switched my car/home insurance provider, June 2014
                                                                                                                                  • Figure 76: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Experienced fraud on a card/bank account, June 2014
                                                                                                                                  • Figure 77: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Lost a debit/credit card or had it stolen, June 2014
                                                                                                                                  • Figure 78: Consumer concerns over various issues in the financial services industry, by consumer experiences with financial services – Struggled to use my payment card or access my online/mobile banking services due to system problems, June 2014
                                                                                                                              • Appendix – Attitudes towards the Financial Services Industry

                                                                                                                                  • Figure 79: Agreement with the statement ‘I object to bonuses received by the senior executives in the banking sector’, by demographics, June 2014
                                                                                                                                  • Figure 80: Agreement with the statement ‘The punishment of individuals for financial misconduct is not severe enough’, by demographics, June 2014
                                                                                                                                  • Figure 81: Agreement with the statement ‘The punishment of financial institutions for financial misconduct is not severe enough’, by demographics, June 2014
                                                                                                                                  • Figure 82: Agreement with the statement ‘The trading/investment services of banks should be kept separate from their customer/retail banking services’, by demographics, June 2014
                                                                                                                                  • Figure 83: Agreement with the statement ‘Bank charges are not transparent enough’, by demographics, June 2014
                                                                                                                                  • Figure 84: Agreement with the statement ‘Building societies tend to be more trustworthy than banks’, by demographics, June 2014
                                                                                                                                  • Figure 85: Agreement with the statement ‘I trust existing companies in the financial services industry more than new entrants’, by demographics, June 2014

                                                                                                                              Companies Covered

                                                                                                                              • Nationwide Building Society

                                                                                                                              The Role of Trust in Financial Services - UK - September 2014

                                                                                                                              £2,195.00 (Excl.Tax)