Table of Contents
Executive Summary
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- Impact of COVID-19 on trust in financial services
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- 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
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- 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
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- Figure 3: Trust in financial services, June 2020
- Functional trust is high, but people are less sure about banks’ broader contribution
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- Figure 4: Trust in financial services, June 2020
- Problems with digital banking drive contact from young people
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- Figure 5: Reasons for contacting main bank, June 2020
- Turning negative experiences into positive outcomes
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- 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
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- Figure 7: Attitudes towards trust in financial services, June 2020
COVID-19 and Trust in Financial Services
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- 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
Issues and Insights
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- Converting COVID-19 lockdown support into long-term trust
- Open dialogue around financial distress could have long-term benefits
- Insurance assumptions must be clarified
The Market – Key Takeaways
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- 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
Market Environment
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- Unemployment set to peak in 2021
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- Figure 8: Unemployment rate, 2007-24
- Payment holidays and removal of late fees draw attention
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- 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
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- Figure 10: Volume of new complaints*, 2018/19 and 2019/20
Trust in Financial Brands
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- Financial services brands are among the least trusted
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- 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
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- Figure 12: Most trusted brands in financial services*, January 2019-June 2020
- 10 years on Metro Bank still struggles to garner trust
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- Figure 13: Least trusted brands in financial services*, January 2019-June 2020
- New brands hold faith among the young
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- Figure 14: Financial brands with greater trust among under-45s, January 2019-June 2020
- Traditional brand names are more trusted by older consumers
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- Figure 15: Brands with greater trust among over-45s, January 2019-June 2020
Advertising and Marketing Activity
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- Lockdown support resonates with customers
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- Figure 16: Barclays – a message from our colleagues, April 2020
- Supporting the wider community
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- Figure 17: Santander – supporting our communities, June 2020
- Financial wellbeing comes to the fore
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- Figure 18: Financial wellbeing advertising, 2019-20
- Hitting the right tone of voice in a recession
The Consumer – Key Takeaways
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- 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
Trust in Financial Services
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- Consumers trust the names they know
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- Figure 19: Trust in financial services, June 2020
- Younger generations are more likely to trust high street banks
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- 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
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- Figure 21: Any trust in high street banks, building societies and mobile-only banks, by region, June 2020
Trust in Main Bank
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- 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
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- Figure 22: Trust in financial services, June 2020
- Nationwide trusted to act for the good of society
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- Figure 23: Trust in factors, by main bank, June 2020
Reasons for Contacting Banks
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- 42% have contacted their main bank in the last three years
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- Figure 24: Reasons for contacting main bank, June 2020
- A fifth of Barclays customers have reported fraud
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- 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
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- Figure 26: Contacted their main bank in the last 3 years to report problems with online/mobile banking, by age, June 2020
Impact of Customer Contact on Trust
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- Proactively dealing with fraud can improve trust
- Customers must be comfortable about reporting financial difficulties
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- 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
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- Figure 28: Impact of customer contact on trust, by type of issue resolved, June 2020
Attitudes towards Trust
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- Consumers are positive about the impact of competition
- Lack of faith in FSCS protection poses a risk
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- Figure 29: Attitudes towards trust in financial services, June 2020
- Branches are about more than just transactions
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- 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
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- Figure 31: Attitudes towards trust in financial services, by main bank, June 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Qualitative research
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