Table of Contents
Executive Summary
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- The market
- The rising cost of living is hitting consumer confidence and driving the need for support
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- Figure 1: Consumer financial sentiment, 2021 and 2022
- Widespread bank branch closures limit face-to-face interactions
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- 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
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- Figure 3: Reasons for seeking assistance, 2022
- Satisfaction is high but could be tested throughout the cost-of-living crisis
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- Figure 4: Overall satisfaction with financial services providers’ customer services, 2022
- Banks must maintain high service standards or risk switching
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- 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
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- Figure 6: Causes of dissatisfaction with financial services customer service, 2022
- In-person service still plays a vital role for more complex issues
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- 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…
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- Figure 8: Attitudes towards customer services, 2022
Issues and Insights
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- 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
Market Drivers
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- Highest inflation levels in 40 years placing strain on household finances
- Prioritise those who are struggling financially for customer service support
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- Figure 9: CPIH and CPI, 12-month rates, 2019-22
- The rising cost of living is hitting consumer confidence
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- 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
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- 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
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- Figure 12: Number of bank and building society branches in the UK, 2016-21
- Unaffordable lending is a key customer complaint
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- Figure 13: New complaints to Financial Ombudsman Service, by sector, 2021
Regulatory and Legislative Changes
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- 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
Competitive Strategies and Innovation
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- 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
Use of Customer Services
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- 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
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- Figure 14: Reasons for seeking assistance, 2022
- Tailor communications to engage younger adults
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- Figure 15: Consumers selecting ‘none of these’ reasons for seeking assistance, by age, 2022
- Younger adults need wide-ranging customer service
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- Figure 16: Repertoire of reasons for seeking assistance, by age, 2022
Customer Service Satisfaction Levels
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- Satisfaction is high but could be tested throughout the cost-of-living crisis
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- 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
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- 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
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- Figure 19: Customer service satisfaction, by type of financial services provider, 2022
Drivers of Dissatisfaction in Customer Services
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- 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
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- 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
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- Figure 21: Causes of dissatisfaction, by age, 2022
Contact Preferences for Customer Services
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- 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
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- 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
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- Figure 23: Method of contact for financial advice, by age, 2022
Customer Service and the Rising Cost of Living
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- 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
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- Figure 24: Advice on inflation and the rising cost of living, by age, 2022
- Prioritise customer service for vulnerable customers
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- Figure 25: Support for those struggling financially, by age, 2022
Attitudes towards Customer Service Experience
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- Younger demographics are more proactive when it comes to dissatisfaction
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- Figure 26: Making formal complaints, by age, 2022
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- Figure 27: Account closures, by age, 2022
- Personalise chatbot interactions to better engage with customers
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- Figure 28: Resolving issues with chatbots, by age, 2022
Attitudes towards Customer Service Interaction
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- Prioritise written records to boost customer satisfaction
- Provide customisable options for records of communication
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- Figure 29: Written records of customer service, by age, 2022
- Providers must offer simple options to book and edit appointments
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- Figure 30: Bookable appointments, by age, 2022
Attitudes towards the Future of Customer Services
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- 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
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- 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
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- Figure 32: Premium rapid-response customer service, by age, 2022
- Utilise third-party apps to promote rapid service for younger consumers
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- Figure 33: Using third-party apps to talk to financial services providers, by age, 2022
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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