Stay ahead of the curve and secure future growth for your business with Mintel’s Trust in Financial Services Report. The report provides a data-led understanding of the financial services industry and enables UK organisations to monitor consumer trust and respond effectively.
Topics Analysed
- Regulatory and legislative changes in the market.
- Trust in financial services sectors, and how this has changed in recent years.
- Factors influencing consumer trust of financial services.
- Influence of contact with brands on consumer trust.
- Challenges in personalisation and data sharing.
- Innovation and marketing trends, including launch activity and brand trust.
Trust in Financial Services in the UK
Rising consumer trust in financial services amid economic struggles
Despite the cost of living crisis, consumer trust in financial service providers has risen since COVID-19, largely due to their supportive responses to these crises. Notably, mobile-only banks and specialist loan companies have seen substantial increases in trust, fuelled by consumers’ increased digital engagement and the tangible impacts of the FCA’s measures to regulate harmful credit practices.
Challenges persist for financial brands in personalisation and digital services
Despite growing trust, financial brands face challenges in delivering personalised and digital-first experiences, as 70% of consumers have indicated that the potential for misuse or scams makes them wary of personalised financial services. Furthermore, in the past three years, 17% of consumers have experienced fraud, and the same proportion have encountered issues with online or mobile banking, underscoring the need to continue to improve digital services.
Proactive support measures key to strengthening consumer trust
Financial services providers that help with financial difficulties, offer effective resolution mechanisms for fraud and other issues, and enhance transparent communication on fees and data usage can alleviate concerns, thereby strengthening trust.
Readers may be interested to browse our wider financial services market research to gain additional insights.
Report Scope
The FCA has defined trust in the financial services industry as having two dimensions: ‘knowledge and skill; and good intentions and honesty. One of these is more technical in nature, the other more moral and ethical.’
According to the UK government, there are two kinds of trust in the financial services industry. The first is the ‘trust between participants in a financial transaction, that the parties will honour their side of the agreement, even if it means unexpected losses for one or more of the parties.’
The second, which is the focus of this Report, is the ‘trust by the population at large that the financial sector is focused on its core role of efficiently bringing savers and investors together in ways that optimise the allocation of private savings to financial investment in physical and human capital’.
Expert Analysis
Industry expert Saltanat Kuermannal delivers in-depth analysis with this report.
Trust in financial services has risen in recent years, but challenges still persist. Increased transparency will be key to further improvements.
Saltanat Kuermannal
Financial Services Analyst
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Executive Summary
- Opportunities
- Maintain support for those experiencing financial difficulties amid the cost of living crisis
- Understand consumers’ desires to offer more relevant advice and guidance
- Transparency is key to trust
- What consumers want and why
- Trust is on the rise…
- Graph 1: proportion of adults who trust companies to treat their customers fairly, 2020, 2024
- …with the highest trust in building societies and high street banks
- Graph 2: proportion of adults who trust companies to treat their customers fairly, 2024
- Transparency is the most important factor influencing trust
- Half of Brits have contacted a bank with a problem in the last three years
- Graph 3: reasons consumers have contacted a bank in the last three years, 2024
- Key areas for enhancing consumer trust
- Brits are broadly accustomed to sharing data with financial services providers
- Consumers are looking for a range of benefits in exchange for personal or financial data
- Concerns about misuse or scams are the main barriers to personalised financial services
- Graph 4: attitudes towards trust in financial services, 2024
- Innovation and marketing
- HSBC pioneers quantum security in banking, forging trust through transparency
- Nationwide boosts charity donations to £9.6 million, reinforcing consumer trust amid cost of living crisis
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Market Dynamics
- Macro-economic factors
- Easing inflation gave greater cause for optimism at the start of 2024…
- Graph 5: CPI inflation rate, 2021-24
- …but high interest rates remain a concern for many
- Consumer sentiment: the recovery is continuing…
- Graph 6: the financial wellbeing index, 2016-24
- …and people feel more confident about their financial prospects
- Graph 7: the financial confidence index, 2016-24
- Regulatory and legislative changes
- FSMA 2023 aiming for a Smarter Regulatory Framework for the UK
- New Consumer Duty places an increased emphasis on trust
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What Consumers Want and Why
- Current level of trust towards financial services providers
- Trust is on the rise…
- Graph 8: proportion of adults who trust companies to treat their customers fairly, 2020, 2024
- … reflecting both the actions taken by brands and structural changes in the sector
- Trust tends to decline with age…
- Graph 9: proportion of adults who trust companies to treat their customers fairly, by age, 2024
- … and increase with household income
- Graph 10: proportion of adults who trust companies to treat their customers fairly, by household income, 2024
- Mobile-only banks need to address the trust factor among older adults
- Graph 11: trust or distrust in mobile-only banks* to treat their customers fairly, by age, 2024
- Factors influencing trust
- Transparency is the most important factor influencing trust…
- Graph 12: factors that are most important for consumers to trust a financial service provider, 2024
- … particularly among those aged 55+
- Graph 13: factors most important for consumers to trust a financial service provider, by age, 2024
- Building trust beyond branches
- Graph 14: factors most important for consumers to trust a financial service provider, by age, 2024
- Develop exclusive experiences and leverage brand reputation among higher-value consumers
- Graph 15: factors most important for consumers to trust a financial service provider, by total value of savings and investments, 2024
- Share positive reviews and testimonials on social media platforms
- Cost-effective security innovations
- Customer contact with banks
- Half of Brits have contacted a bank with a problem in the last three years…
- Graph 16: reasons consumers have contacted a bank in the last three years, 2024
- …primarily to report a lost or stolen card
- Graph 17: reasons for contacting a bank in the last three years, by age, 2024
- Increase awareness of help with financial difficulty among lower-income households
- Influence of contact with banks on trust
- Contact with banks is much more likely to improve trust than erode it
- Graph 18: how much people trust their bank to look out for their best interests after contacting them, by type of issue most recently resolved, 2024
- Key areas for enhancing customer trust
- Complaints offer an opportunity to prove banks are on their customers’ side
- Personalisation and data sharing
- Brits are broadly accustomed to sharing data with financial services providers
- Graph 19: types of personal/financial information consumers would be willing to share with a financial services provider, 2024
- Higher-earners are much more willing to share their financial transaction data
- Graph 20: proportion of consumers willing to share their financial transaction data with a financial services provider, by household income, 2024
- General reluctance to share social media data
- Graph 21: proportion of consumers willing to share their social media data with a financial services provider, by generation, 2024
- Consumers are looking for a range of benefits in exchange for personal or financial data
- Graph 22: personalised services people would be willing to share personal/financial data with financial services companies to access, 2024
- Understand consumers’ desires to offer more relevant advice and guidance
- Insurance set for innovation as smart devices become more common
- Attitudes towards trust in financial services
- Concerns about misuse or scams are the main barriers to personalised financial services
- Graph 23: attitudes towards trust in financial services, 2024
- Brands are yet to prove the benefits of data sharing to older groups
- Graph 24: ‘I think that sharing personal/financial information can make financial services more efficient’, by age, 2024
- Trust in fair pricing policies is weakest among middle-aged Brits
- Support for those experiencing financial difficulties amid the cost of living crisis
- Digital communications are most valued by young parents
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Innovation and Marketing Trends
- Competitive landscape
- Nationwide launches a new Home Energy Efficiency Tool for sustainable living and zero-interest eco-upgrades
- Sibstar partners with Alzheimer’s Society and Mastercard to launch new debit card & app for people with dementia
- HSBC pioneers quantum security in banking, forging trust through transparency
- Nationwide boosts charity donations to £9.6 million, reinforcing consumer trust amid cost of living crisis
- Revolut launches AI feature to shield customers from scams
- Trust in financial brands
- Increased trust in PayPal Credit and Compare the Market
- Graph 25: most trusted brands in financial services*, 2023-24
- Challenger brands struggle to convince
- Graph 26: least trusted brands in financial services*, 2023-24
- A lesson from the Post Office scandal
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Appendix
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Methodology
- Consumer research methodology
- CHAID analysis – methodology data
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