48% have been reassured by their bank’s adverts since the COVID-19 outbreak, highlighting how the pandemic has given financial brands an opportunity to rebuild an emotional connection with customers.

Financial services have generally been less impacted by COVID-19 than sectors such as leisure or travel, and this has presented an opportunity to capitalise on reduced demand for media space. As a result, financial brands have enjoyed a greater share of voice and leveraged this to reach out to customers to reassure them and provide practical advice and support during a difficult time. The shift in focus from reaching new customers to reassuring existing ones should help lay the foundations of improved customer engagement in the post-pandemic world.

Financial services brands have an opportunity to build on consumers’ improved perceptions of the industry coming out of the pandemic. The increased use of digital channels to communicate with friends, family and businesses also presents an opportunity for financial services advertising to engage with consumers on a more emotional level.

A lack of financial literacy risks undermining the ability of consumers to make the right choices. Young people are particularly likely to lack confidence in the terminology commonly used in advertising financial services, making them more susceptible to being persuaded by unregulated products or risky choices. Advertising is already increasingly being used to educate and guide customers to better choices, and this should have greater resonance if the sector emerges from the pandemic with an enhanced reputation for supporting customers through difficult times.

Key issues covered in this report

  • The impact of COVID-19 on consumer attitudes towards financial services advertising.

  • Analysis of advertising spend and the channels used for above-the-line advertising campaigns, as well as how this differs by financial product.

  • Consumers’ exposure to and recollection of financial services advertising.

  • Consumers’ understanding of financial terms often used in advertising and how this differs by demographics.

  • How consumers feel about different advertising channels in terms of trust and engagement.

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. As the case level rose, the government ordered the closure of non-essential stores on 20 March. 

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. It wasn't until 15 June that non-essential stores were allowed to re-open, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a full month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions. 

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions in January 2021, effectively leading to a full UK-wide lockdown. There is no defined end date for the lockdown, although the legislation that was presented to Parliament for the English lockdown extends to 31 March.

The UK’s vaccination programme started on 8 December 2020, and with both the Pfizer-BioNTech and Oxford-AstraZeneca vaccines licenced for use in the UK, the government aims to offer a vaccine to 15 million people by mid-February.

Impact of the January lockdown and the vaccination rollout

Our core assumptions on the path of the pandemic had always included an expectation of severe disruption to markets and consumers’ lifestyles well into 2021, with a strong likelihood that the virus would still be with us even into 2022. Although the second wave of infections and subsequent lockdown puts us towards the negative end of our initial expectations, these developments are still broadly consistent with our previous assumptions.

Similarly, Mintel had factored in the likelihood that an effective vaccine would be available from early- to-mid 2021. The licensing of the Pfizer-BioNTech and Oxford-AstraZeneca vaccines puts us slightly ahead of that assumption, but the challenge associated with rolling out a new vaccination programme to millions of people means that our previous assumptions are still broadly consistent with the new reality.

Economic and other assumptions

Mintel’s economic assumptions are based on the OBR’s central scenario included in its November 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP will have fallen by 11.3% in 2020, recovering by 5.5% in 2021, and 6.6% in 2022. GDP isn’t expected to return to pre-COVID levels until the fourth quarter of 2022. The central scenario has unemployment peaking at 7.5% in Q2 2021.

The current uncertainty, however, means there is wide variation on the range of forecasts, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q4 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The second wave of infections and subsequent lockdowns means that the short-term prospects for the country are consistent with the OBR’s negative scenario, but this needs to be balanced against the vaccine rollout progressing ahead of even the OBR’s central scenario. Medium to long term, we are therefore still basing our forecasts and market analysis on the OBR’s central economic scenario.

Products covered in this Report

This Report is focused on consumer attitudes towards advertising for financial services. This includes advertising for retail banking, secured and unsecured lending, insurance, investments and other financial products.

Advertising can be for specific financial products (including by brands not primarily focused on financial services such as retailers) or general brand building for financial brands.

The market size includes the amount spent on advertising via television, radio, press, internet display advertising, outdoor, radio, cinema, direct mail and door drops according to NAI. Spend on sponsorship, search and social are not currently measured by NAI, although activity in these areas are discussed within the Report and explored in the consumer research.

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