2022
9
UK Customer Service Preferences in Financial Services Market Report 2022
2022-06-28T04:02:51+01:00
OX1104579
2195
152440
[{"name":"Financial Services","url":"https:\/\/store.mintel.com\/industries\/finance\/financial-services"}]
Report
en_GB
“Although customer service satisfaction levels are fairly high, there is vulnerability as branch closures continue and the cost-of-living crisis drives the need for support. Many consumers still prefer human interaction,…

UK Customer Service Preferences in Financial Services Market Report 2022

£ 2,195 (Excl.Tax)

Description

“Although customer service satisfaction levels are fairly high, there is vulnerability as branch closures continue and the cost-of-living crisis drives the need for support. Many consumers still prefer human interaction, especially for more complex issues and advice. This will require the shift to digital communication to retain face-to-face communications, with providers needing to expand video appointments and raise awareness of the service.”
– Grace Alexander, Market Research Analyst, June 2022

Key issues covered in this Report

  • The impact of the rising cost of living on financial services providers’ customer services.
  • Consumer use of customer services and satisfaction levels.
  • Drivers of consumer dissatisfaction with customer services.
  • Consumer contact preferences for financial services providers’ customer services.
  • Attitudes towards customer service experience.
  • Attitudes towards the future of customer services and innovations.

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
  2. Executive Summary

    • The market
    • The rising cost of living is hitting consumer confidence and driving the need for support
      • Figure 1: Consumer financial sentiment, 2021 and 2022
    • Widespread bank branch closures limit face-to-face interactions
      • Figure 2: Number of bank and building society branches in the UK, 2016-21
    • The consumer
    • Providers must be prepared for usage to grow as inflation spirals
    • Ensure security and fraud issues can be reported 24/7
      • Figure 3: Reasons for seeking assistance, 2022
    • Satisfaction is high but could be tested throughout the cost-of-living crisis
      • Figure 4: Overall satisfaction with financial services providers’ customer services, 2022
    • Banks must maintain high service standards or risk switching
      • Figure 5: Customer service satisfaction, by type of financial services provider, 2022
    • Branch closures could drive dissatisfaction further…
    • …but the shift to digital services can help reduce waiting times
      • Figure 6: Causes of dissatisfaction with financial services customer service, 2022
    • In-person service still plays a vital role for more complex issues
      • Figure 7: Contact preferences, by issue, 2022
    • Financial services providers must offer guidance on rising cost of living
    • Prioritise written records to boost customer satisfaction
    • The use of VR must go beyond one-off novelty experience…
      • Figure 8: Attitudes towards customer services, 2022
  3. Issues and Insights

    • Address concerns over rising cost-of-living to maintain satisfaction levels
    • Be proactive in offering advice to boost financial education
    • Tailor services to help advice younger customers…
    • …or risk complaints and account closures
    • Expectations over levels of digital service will grow as more branches close
    • Raise awareness of video appointments and expand availability
    • Utilise appointments and written records of communications
    • Use rapid-response premium customer service as a perk of fee-paying accounts
  4. Market Drivers

    • Highest inflation levels in 40 years placing strain on household finances
    • Prioritise those who are struggling financially for customer service support
      • Figure 9: CPIH and CPI, 12-month rates, 2019-22
    • The rising cost of living is hitting consumer confidence
      • Figure 10: Consumer financial sentiment, 2021 and 2022
    • Energy crisis tops the list of consumer financial concerns
    • Rising grocery prices becoming a major concern for many households
      • Figure 11: Factors impacting financial situation, 2022
    • COVID-19 accelerated the shift to digital customer services
    • Widespread bank branch closures limit face-to-face interactions…
    • …but customer service needs to retain some personal interaction
      • Figure 12: Number of bank and building society branches in the UK, 2016-21
    • Unaffordable lending is a key customer complaint
      • Figure 13: New complaints to Financial Ombudsman Service, by sector, 2021
  5. Regulatory and Legislative Changes

    • FCA’s Consumer Duty will have important implications for customer services
    • National Insurance rate rises 1.25 percentage points
    • Student loan interest rates are set to rise in England and Wales
    • Government updates financial support following energy cap rise
    • FCA adapts guidelines as more bank branches close
  6. Competitive Strategies and Innovation

    • Financial services providers increasingly focused on the cost-of-living crisis
    • Branch closures continue at a rapid rate
    • Some retained branches are reducing operating hours
    • Nationwide states it will keep branches open to help with the cost-of-living crisis
    • Shared hubs will help retain access to basic banking services
    • Wide-ranging digital banking services will be vital as branches close
    • Expansion of video chat could help to provide guidance on the cost of living
    • HSBC UK expands video support for investment advice
    • NatWest looks to social media influencers to engage younger audience
    • Fintech Frost launches app focused on cost of living
    • AWS works with NatWest for data-driven services
  7. Use of Customer Services

    • Providers must be prepared for usage to grow as inflation spirals
    • Ensure security and fraud issues can be reported 24/7
    • Be proactive with product and service information
      • Figure 14: Reasons for seeking assistance, 2022
    • Tailor communications to engage younger adults
      • Figure 15: Consumers selecting ‘none of these’ reasons for seeking assistance, by age, 2022
    • Younger adults need wide-ranging customer service
      • Figure 16: Repertoire of reasons for seeking assistance, by age, 2022
  8. Customer Service Satisfaction Levels

    • Satisfaction is high but could be tested throughout the cost-of-living crisis
      • Figure 17: Overall satisfaction with financial services providers’ customer services, 2022
    • Older consumers are the least satisfied with customer services
    • Satisfaction of younger demographics will be tested as need for support grows
    • Branch closures could hit satisfaction amongst older consumers
      • Figure 18: Overall satisfaction with financial services providers’ customer services, by age, 2022
    • Online mobile wallet issues must be rapidly resolved to maintain satisfaction
    • Banks must maintain high service standards or risk switching
      • Figure 19: Customer service satisfaction, by type of financial services provider, 2022
  9. Drivers of Dissatisfaction in Customer Services

    • Branch closures could drive dissatisfaction further…
    • …but the shift to digital services can help reduce waiting times
    • Shared hubs could address consumer desire for in-branch experiences
      • Figure 20: Causes of dissatisfaction with financial services customer service, 2022
    • Prioritise 24/7 assistance to reduce dissatisfaction among younger consumers
    • Older generations more likely to be dissatisfied with lack of physical branch
      • Figure 21: Causes of dissatisfaction, by age, 2022
  10. Contact Preferences for Customer Services

    • In-person service still plays a vital role for more complex issues
    • Prioritise phone service for dealing with security issues and fraud concerns
    • Providers must raise awareness of video chat as branches close
      • Figure 22: Contact preferences, by issue, 2022
    • Flexible contact options for advice are vital to cater for all age groups
    • Traditional methods dominate but providers must boost awareness of video calls
      • Figure 23: Method of contact for financial advice, by age, 2022
  11. Customer Service and the Rising Cost of Living

    • Financial services providers must offer guidance on rising cost of living
    • Proactive support will be key in helping people navigate the rising cost of living
    • Financial services providers can boost financial education through multichannel events
      • Figure 24: Advice on inflation and the rising cost of living, by age, 2022
    • Prioritise customer service for vulnerable customers
      • Figure 25: Support for those struggling financially, by age, 2022
  12. Attitudes towards Customer Service Experience

    • Younger demographics are more proactive when it comes to dissatisfaction
      • Figure 26: Making formal complaints, by age, 2022
      • Figure 27: Account closures, by age, 2022
    • Personalise chatbot interactions to better engage with customers
      • Figure 28: Resolving issues with chatbots, by age, 2022
  13. Attitudes towards Customer Service Interaction

    • Prioritise written records to boost customer satisfaction
    • Provide customisable options for records of communication
      • Figure 29: Written records of customer service, by age, 2022
    • Providers must offer simple options to book and edit appointments
      • Figure 30: Bookable appointments, by age, 2022
  14. Attitudes towards the Future of Customer Services

    • Create engaging VR propositions to engage young consumers
    • Financial services companies are starting to look into the metaverse
    • The use of VR must go beyond one-off novelty experience…
    • …and look to boost headset ownership
      • Figure 31: Virtual reality customer services, by age, 2022
    • Fee-paying premium customer services can help boost 24/7 support
    • Premium support could capitalise on the technological engagement of younger demographics
    • Use premium customer service to drive interest in fee-paying current accounts
      • Figure 32: Premium rapid-response customer service, by age, 2022
    • Utilise third-party apps to promote rapid service for younger consumers
      • Figure 33: Using third-party apps to talk to financial services providers, by age, 2022
  15. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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