The coronavirus outbreak has led consumers to review their approach to their finances and personal spending, increasing their focus on savings and rethinking spending habits. In research run between 6-14 August 2020, for example, 44% of consumers said they were reducing non-essential spending. As such, it is likely to prove a good time for savings account providers to attract new customers, and for financial services brands in general to use this revived interest in financial management to reconnect with their customer base.

At the same time, the pandemic has highlighted the usefulness of technological innovations like mobile banking and contactless payments, accelerating the shift towards digital banking. It will be crucial for brands to invest in ensuring that all consumers are comfortable and capable with using such services in order to provide continual support and efficient customer service, particularly if there is a second wave in the winter of 2020.

The lockdown and associated disruption has had a huge economic impact, immediately pushing the UK into recession and, in turn, increasing the financial pressures on many households. Bad debts will inevitably rise, and cost-conscious consumers will be even more focused on getting the best possible deal from their financial services providers. This dynamic will also present a major brand challenge, in terms of how providers support their customers through these difficult times.

In contrast to the 2008/09 recession, where banks were cast as enemy in the media, COVID-19 provides financial services brands with the opportunity to challenge negative assumptions and highlight the vital role that financial institutions can play in supporting single individuals and the whole economy. As well as supporting consumers during the peak of the crisis, brands can take a more far-sighted approach by sharing their plans to support their customers in the medium and longer term.

Key issues covered in this report

  • The impact of COVID-19 on Financial Services Consumers.

  • How leading financial services brands score on metrics like consumer usage, trust, preference, differentiation, and satisfaction and recommendation.

  • The top scoring brands for particular personality traits including ethics, customer service, competency, reliability and consumer perceptions about exclusivity and prestige.

  • The leaders on hot topics in the financial services sector – progressiveness and supportiveness, and consumer perceptions about rewarding loyalty.

COVID-19: Market context

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20th March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23rd March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks. In April, the government’s job retention scheme came into force, and is set to end in October. As of 27 May, 8.4 million employees had been furloughed under the scheme.

The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 came into effect on 15 June allowing the reopening of all non-essential stores in England as well as the mandatory use of face coverings on public transport. Pubs, restaurants, hotels and hairdressers were able to reopen on 4 July, with many beauty businesses following on 13 July. From 24 July, it became mandatory to wear face coverings in shops and supermarkets.

In July, the government announced a series of measures to kick-start the economy, including a targeted VAT reduction, a temporary increase to the stamp-duty threshold to incentivise house purchases and a discount scheme for pubs and restaurants.

Rules on travel remain fluid: from 10 July, travellers from more than 50 “low risk” countries no longer had to self-isolate for 14 days, but on 28 July the removal of Spain from this list of low-risk countries dominated headlines in the UK, and by August further countries (including France) had been removed from this list.

In July and August, several local restrictions were enforced in the UK, most notably in Leicester, in parts of the north west of England and in Aberdeen.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

Products covered in this Report

Since December 2016, Mintel has conducted brand research on more than 65 brands operating in financial services markets. As well as consumers’ attitudes towards brands, we investigate how many people have used those brands, how positive their experience of the brand was, and whether they would recommend that brand.

Research is run at a brand level, rather than based on a particular product. So rather than asking specifically about people’s perception of Barclays’ current accounts or of Direct Line’s car insurance, for example, we ask about their overall perception of the Barclays and Direct Line brands.

Data in this Report is drawn from fieldwork conducted between November 2017 and June 2020. Many brands have been covered on multiple occasions and, unless otherwise stated, Mintel’s data refers to the most recent wave of research in which a given brand featured. Please refer to the Appendix for details of the Reports from which the brand data has been taken.

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