2020
9
UK Trust in Financial Services Market Report 2020
2020-09-04T09:23:54+01:00
OX989498
2195
124709
[{"name":"Financial Services","url":"https:\/\/store.mintel.com\/industries\/finance\/financial-services"}]
Report
en_GB
“The immediate response of the financial industry to COVID-19 helped garner support from consumers. However, with the full economic damage of the crisis yet to be felt, the industry faces…

UK Trust in Financial Services Market Report 2020

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK Trust in Financial Services market, including the behaviours, preferences and habits of the consumer.

The Office for Budget Responsibility predicts that UK GDP could fall by 12.4% in 2020, with a spike in unemployment predicted as the furlough scheme comes to an end coming out of 2020. Thoughout the COVID-19 pandemic, consumer spending dropped and savings rose thanks to the closure of non-essential businesses.

With 44% of consumers thinking that customers money will be protected if a bank collapses, consumer trust in financial services is vital to the recovery and future growth of the industry. Thanks to the economic uncertainty and downturn as a result of the pandemic, brands have a unique opportunity to Improve trust by supporting struggling customers.

As restrictions lift, households will have to face the realities of unemployment or loss of income, especially with the return to higher loan and mortgage repayments. With 45% of consumers agreeing that the financial service industry is going a good job at supporting society in the pandemic, consumers will remember brands that stood with them and helped them during financial issues.

Read on to discover more details or take a look at all of our UK Financial Services market research.

Quickly understand

  • The impact of COVID-19 on trust in financial services.
  • An exploration of what trust means to consumers in the context of the financial services industry.
  • How trust differs between financial brands and how different age groups feel about financial brands.
  • How the financial services sector can seek to establish customer relationships built on trust during an economic downturn.
  • How trust can be formed and destroyed and why it matters.

Included in this report

Brands: Post Office, RAC, The AA, CompareTheMarket, Aviva, Nationwide Building Society, Barclaycard, PayPal Credit, Direct Line, MoneySuperMarket, esure, Virgin Money, Zopa, FairFX, Vanquis, Debenhams Personal Finance, Columbus Direct, Aqua, Alpha, Metro Bank, Starling, Revolut, Vitality, Klarna, Monzo, Eurochange, Travelex, NatWest, Yorkshire Building Society, Churchill, Scottish Widows, Coventry Building Society, LV=, M&S Bank, John Lewis Finance, Saga, Santander, First Direct.

Expert analysis from a specialist in the field

Written by Thomas Slide, a leading analyst in the Finance sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The immediate response of the financial industry to COVID-19 helped garner support from consumers. However, with the full economic damage of the crisis yet to be felt, the industry faces a huge challenge to convert that goodwill into long-term trust. This will require proactive communication and open dialogue, as well as emotional support and practical advice as households struggle to adapt to the ‘next normal’ and what it means for their finances.

Thomas Slide
Senior Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
  2. Executive Summary

    • Impact of COVID-19 on trust in financial services
      • Figure 1: Short, medium and long-term impact of COVID-19 on trust in financial services, August 2020
    • The market
    • Rising unemployment poses a threat to trust
      • Figure 2: Unemployment rate, 2007-24
    • Payment holidays and removal of late fees improve perceptions
    • The most trusted brands are those with reputations from other sectors
    • Advertising focuses on supporting customers and communities
    • The consumer
    • Young people are more likely to trust banks
      • Figure 3: Trust in financial services, June 2020
    • Functional trust is high, but people are less sure about banks’ broader contribution
      • Figure 4: Trust in financial services, June 2020
    • Problems with digital banking drive contact from young people
      • Figure 5: Reasons for contacting main bank, June 2020
    • Turning negative experiences into positive outcomes
      • Figure 6: Impact of customer contact on trust, by reason for contacting main bank, June 2020
    • A lack of faith in protections makes trust more important than ever
      • Figure 7: Attitudes towards trust in financial services, June 2020
  3. COVID-19 and Trust in Financial Services

    • The impact of COVID-19 on trust
    • Consumers felt supported during lockdown
    • Insurers faced a huge challenge
    • Opportunities
    • Consumers have become more comfortable with digital communications
    • Support for the community and personal wellbeing messages will resonate
    • A chance to go beyond price for insurers
    • Threats
    • Debt holidays will need to be repaid
    • Rising unemployment will strain relationships
    • Broader societal shifts pose a risk to the customer experience
  4. Issues and Insights

    • Converting COVID-19 lockdown support into long-term trust
    • Open dialogue around financial distress could have long-term benefits
    • Insurance assumptions must be clarified
  5. The Market – Key Takeaways

    • Rising unemployment poses a threat to trust
    • Payment holidays and removal of late fees improve perceptions
    • The most trusted brands are those with reputations from other sectors
    • Hitting the right tone of voice in a recession
  6. Market Environment

    • Unemployment set to peak in 2021
      • Figure 8: Unemployment rate, 2007-24
    • Payment holidays and removal of late fees draw attention
      • Figure 9: Coronavirus support options, consumer heat map, May 2020
    • COVID-19 offers insurers a chance to stand out
    • Government commits to protecting access to cash
    • FCA investigates pricing practices in the general insurance sector
    • Algorithmic bias presents a risk to consumer trust
    • A fall in complaints to the ombudsman
      • Figure 10: Volume of new complaints*, 2018/19 and 2019/20
  7. Trust in Financial Brands

    • Financial services brands are among the least trusted
      • Figure 11: Agreement with ‘A brand that I trust’, average of brands within each sector, January 2019-June 2020
    • Leveraging trust from one sector to another
      • Figure 12: Most trusted brands in financial services*, January 2019-June 2020
    • 10 years on Metro Bank still struggles to garner trust
      • Figure 13: Least trusted brands in financial services*, January 2019-June 2020
    • New brands hold faith among the young
      • Figure 14: Financial brands with greater trust among under-45s, January 2019-June 2020
    • Traditional brand names are more trusted by older consumers
      • Figure 15: Brands with greater trust among over-45s, January 2019-June 2020
  8. Advertising and Marketing Activity

    • Lockdown support resonates with customers
      • Figure 16: Barclays – a message from our colleagues, April 2020
    • Supporting the wider community
      • Figure 17: Santander – supporting our communities, June 2020
    • Financial wellbeing comes to the fore
      • Figure 18: Financial wellbeing advertising, 2019-20
    • Hitting the right tone of voice in a recession
  9. The Consumer – Key Takeaways

    • Identity is driving people away from building societies
    • Functional trust is high, but there are still concerns about CSR issues
    • Turning negative experiences into positive outcomes
    • A lack of faith in protections makes trust more important than ever
  10. Trust in Financial Services

    • Consumers trust the names they know
      • Figure 19: Trust in financial services, June 2020
    • Younger generations are more likely to trust high street banks
      • Figure 20: Trust in high street banks and building societies, by generation, June 2020
    • Mobile-only banks continue to garner most trust from city dwellers
      • Figure 21: Any trust in high street banks, building societies and mobile-only banks, by region, June 2020
  11. Trust in Main Bank

    • Consumers trust banks to keep them safe…
    • …but are less convinced about their ability to provide advice
    • Less than half trust their bank to protect the environment
      • Figure 22: Trust in financial services, June 2020
    • Nationwide trusted to act for the good of society
      • Figure 23: Trust in factors, by main bank, June 2020
  12. Reasons for Contacting Banks

    • 42% have contacted their main bank in the last three years
      • Figure 24: Reasons for contacting main bank, June 2020
    • A fifth of Barclays customers have reported fraud
      • Figure 25: Proportion of customers of each banking brand who have contacted their main bank to report fraud or suspicious activity, by main bank, June 2020
    • Digital problems are not driven by a lack of understanding
      • Figure 26: Contacted their main bank in the last 3 years to report problems with online/mobile banking, by age, June 2020
  13. Impact of Customer Contact on Trust

    • Proactively dealing with fraud can improve trust
    • Customers must be comfortable about reporting financial difficulties
      • Figure 27: Impact of customer contact on trust, by reason for contacting main bank, June 2020
    • Non-bank-caused issues provide an opportunity for improved perception
      • Figure 28: Impact of customer contact on trust, by type of issue resolved, June 2020
  14. Attitudes towards Trust

    • Consumers are positive about the impact of competition
    • Lack of faith in FSCS protection poses a risk
      • Figure 29: Attitudes towards trust in financial services, June 2020
    • Branches are about more than just transactions
      • Figure 30: Attitudes towards trust in financial services, by main bank, June 2020
    • NatWest customers are most positive about the response to COVID-19
    • Nationwide customers may be cynical about the wider industry
      • Figure 31: Attitudes towards trust in financial services, by main bank, June 2020
  15. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
    • Qualitative research

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