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UK Financial Capability market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Financial Capability market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

This report examines the following issues:

  • Consumers see opportunities for advice, but need to be convinced
  • Making finance fun can be hard, but interest is a key part of capability
  • Compulsory education should produce a more capable population

Expert analysis from a specialist in the field

Written by Richard Shepherd, 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.

Engaging consumers early and making it easy for them to develop good habits and pick up knowledge is key to raising financial capability. Developments such as the introduction of compulsory financial education and the launch of the UK Financial Capability Strategy have put financial capability at the heart of strategy decisions in both the public and private spheres. As consumers are being forced to take more responsibility for their personal finances, financial services providers cannot afford to ignore financial capability issues as they seek to deliver more services directly to consumers. Richard Shepherd
Senior Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
    • Executive Summary

        • The market
          • FCA aiming to transform culture and tackle data misuse
            • Companies and brands
              • Just 19% trust financial services brands
                • Figure 1: Agreement with ‘A brand that I trust’ for brands in the financial services, beauty and personal care, drink, retail and food sectors, November 2015-May 2018
              • The Post Office is the most trusted financial services brand
                • Figure 2: Top ranking of brands in the financial services sector, by agreement with “A brand that I trust”, November 2015-May 2018
              • The Consumer
                • Building societies the most trusted financial services companies
                  • Figure 3: Extent to which consumers trust companies to treat them fairly, August 2018
                • Overcomplicated financial information the main factor causing distrust
                  • Figure 4: Factors which contribute to a lack of trust, August 2018
                • Customer service still plays a key role
                  • Figure 5: Important features for building trust, August 2018
                • Online-only banks behind tech firms in terms of trust and data security
                  • Figure 6: Trust in financial services companies to hold personal and financial data securely, August 2018
                • Consumers undecided on whether trust is improving
                  • Figure 7: Attitudes towards trust and financial services providers, August 2018
                • A quarter would trust alternative providers
                  • Figure 8: Attitudes towards trust and financial services providers, August 2018
                • What we think
                • Issues and Insights

                  • Simplify financial information to increase trust
                    • The facts
                      • The implications
                        • Embracing Open Banking and newer challengers will drive greater trust
                          • The facts
                            • The implications
                            • The Market – What You Need to Know

                              • FCA looking to tackle both culture and data misuse
                                • ‘Unreadable’ financial content causes trust issues
                                • Market Environment

                                  • Data misuse top of FCA agenda
                                    • UK watchdog opening more cases than before…
                                      • …and looking to address bank IT failures
                                        • FCA looking to transform culture
                                          • RBS Global Restructuring Group escapes punishment
                                            • ‘Unreadable’ financial services websites contributing to lack of trust
                                              • Amazon looking to increase its influence in financial services
                                              • Companies and Brands – What You Need to Know

                                                • Just 19% trust financial services brands
                                                  • The Post Office is the most trusted financial services brand
                                                  • Trust and Financial Services Brands

                                                    • Just 19% trust financial services brands
                                                      • Figure 9: Agreement with ‘A brand that I trust’ for brands in the financial services, beauty and personal care, drink, retail and food sectors, November 2015-May 2018
                                                    • Post Office the only brand with greater than 50% trust
                                                      • Figure 10: Top ranking of brands in the financial services sector, by agreement with “A brand that I trust”, November 2015-May 2018
                                                    • Non-traditional lenders dominate brands with the lowest trust
                                                      • Figure 11: Bottom ranking of brands in the financial services sector, by agreement with “A brand that I trust”, November 2015-May 2018
                                                  • The Consumer – What You Need to Know

                                                    • Building societies and banks the most trusted financial services companies
                                                      • Ownership leads to increased levels of trust
                                                        • Overcomplicated financial information the main factor causing distrust
                                                          • Customer service still plays a key role
                                                            • Online-only banks behind tech firms in terms of trust and data security
                                                              • Consumers undecided on whether trust is improving
                                                                • A quarter would trust alternative providers
                                                                • Financial Services Industry in Context

                                                                  • Building societies and banks lead the way for financial services companies
                                                                    • Figure 12: Extent to which consumers trust companies to treat them fairly, August 2018
                                                                  • Investment firms have the lowest trust rating in financial services
                                                                    • Younger generation more likely to trust financial services providers
                                                                      • Figure 13: Proportion of consumers who trust companies to treat them fairly, by age, August 2018
                                                                    • Well-off consumers more likely to trust brands
                                                                      • Figure 14: Proportion of consumers who trust companies to treat them fairly, by financial situation, August 2018
                                                                  • Effect of Ownership on Trust

                                                                    • Ownership drives trust
                                                                      • Figure 15: Proportion of consumers who trust mortgage lenders and investment firms to treat them fairly, by product ownership, August 2018
                                                                    • Increased product ownership leads to greater levels of trust
                                                                      • Figure 16: Proportion of consumers who trust financial services providers to treat them fairly, by number of financial products owned, August 2018
                                                                    • More trust in insurers among owners of health and life insurance
                                                                      • Figure 17: Proportion of consumers who trust insurance companies to treat them fairly, by product ownership, August 2018
                                                                  • Factors Contributing towards Distrust

                                                                    • Half feel misleading terms and conditions have led to distrust
                                                                      • 30% blame poor customer service and negative media coverage
                                                                          • Figure 18: Factors which contribute to a lack of trust, August 2018
                                                                      • Building Trust in Financial Services

                                                                        • Clear financial information the key
                                                                          • Figure 19: Important features for building trust, August 2018
                                                                        • Customer service still a major factor
                                                                          • Problem resolution is an opportunity to build trust
                                                                            • Regular updates resonate with investors
                                                                              • Figure 20: Importance of regular product updates and reminders in building trust, by product ownership, August 2018
                                                                            • A one-size-fits-all approach is insufficient
                                                                              • Figure 21: Repertoire of important features for building trust, August 2018
                                                                          • Trust and Data Security

                                                                            • Majority trust banks to look after their personal or financial data
                                                                              • Only one in four would trust an online-only bank
                                                                                • Figure 22: Trust in financial services companies to hold personal and financial data securely, August 2018
                                                                              • Younger Millennials place more faith in tech companies…
                                                                                • …while older generations are more trusting of pension providers
                                                                                  • Figure 23: Proportion of consumers who trust pension providers, technology firms and online-only banks to hold their personal and financial data securely, by generation, August 2018
                                                                              • Attitudes towards Financial Services Providers

                                                                                • One in four do not trust their financial services providers to be fair, open and honest
                                                                                  • Consumers split as to whether trust is improving
                                                                                    • Figure 24: Attitudes towards trust and financial services providers, August 2018
                                                                                  • Increased faith among those with greater ownership
                                                                                    • Figure 25: Agreement with statements about trust and financial providers, by number of financial products owned, August 2018
                                                                                • Trust in Alternative Providers

                                                                                  • A quarter would trust an alternative financial services provider
                                                                                      • Figure 26: Attitudes towards trust and financial services providers, August 2018
                                                                                    • Greater receptiveness among wealthier households
                                                                                      • Figure 27: Agreement with statements about trust and financial providers, by household income, August 2018
                                                                                    • Comfortable 18-34-year-olds the most likely to trust a large tech firm
                                                                                      • Figure 28: Trust in large tech firms to manage financial services – CHAID – Tree output, August 2018
                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                      • Abbreviations
                                                                                        • Consumer research methodology
                                                                                          • CHAID Methodology