Table of Contents
Executive Summary
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- Impact of COVID-19 on customer service in FS
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on customer service in financial services, May 2021
- The market
- Regulatory focus on vulnerable customers and fairness likely to intensify
- Digital banks top service league ranks
- Confidence has largely recovered…
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- Figure 2: Financial confidence index, April 2016-April 2021
- …but financial impact will need addressing
- Use of smartphones for everyday activities continues to increase
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- Figure 3: Smartphone activities, July 2019 and March 2021
- The consumer
- COVID-19 disrupts consumer finances…
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- Figure 4: Impact of COVID-19 on consumer finances, 4-12 March 2021
- …and preferred contact channels
- Perceptions of good customer service vary greatly by sector
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- Figure 5: General impression of customer service offered, selected sectors, March 2021
- 24/7 assistance will soon be a standard expectation
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- Figure 6: Most important factors in customer service, March 2021
- The human touch needs to be prioritised for serious queries
- Preference for email means this channel has a higher role to play in FS
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- Figure 7: Channel preferences in customer service, March 2021
- Unhappy customers will react, but good customer service can turn negatives into positives
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- Figure 8: Actions taken in response to poor customer service, March 2021
- COVID-19 is no longer an excuse and people want things to return to normal
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- Figure 9: COVID-19 and customer service, March 2021
- Shift to digital highlights importance of support for vulnerable customers
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- Figure 10: Attitudes towards customer service, March 2021
Issues and Insights
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- An irreversible shift to digital brings opportunities for customer service…
- …and highlights the value of human contact
- Prioritising support for vulnerable customers will be a legacy of the pandemic
- Addressing fraud and data security will become more pressing
The Market – Key Takeaways
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- Regulatory focus on vulnerable customers and fairness likely to intensify
- Confidence has largely recovered but financial impact will need addressing
Market Environment
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- FCA finalises guidance on the fair treatment of vulnerable customers…
- …and proposes a new Consumer Duty
- Contactless payment limit to increase to £100…
- …but access to cash will be protected
- Majority of official complaints relate to banking and credit
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- Figure 11: New complaints to Financial Ombudsman Service, by sector, H2 2020
- Digital banks top service league ranks
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- Figure 12: Personal banking service quality in Great Britain, January-December 2020
- Mandated and voluntary information of current account services
Market Drivers
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- Consumer confidence is recovering…
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- Figure 13: Financial confidence index, April 2016-April 2021
- …but deterioration of household finances will need addressing…
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- Figure 14: Changes in household finances, April 2016-April 2021
- …while a spike in unemployment is coming
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- Figure 15: Unemployment rate and forecast, 2016/25
- Use of technology for everyday activities continues to increase…
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- Figure 16: Tablet, laptop and desktop, July 2019 and March 2021
- …particularly for smartphones…
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- Figure 17: Smartphone activities, July 2019 and March 2021
- …but not everyone owns a device
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- Figure 18: Personal ownership of technology, March 2021
The Consumer – Key Takeaways
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- COVID-19 disrupts consumer finances and preferred contact channels
- Perceptions of good customer service vary greatly by sector
- 24/7 assistance will soon be expected
- The human touch needs to be prioritised for serious queries
- Preference for email means this channel has a higher role to play in FS
- Unhappy customers will react, but good customer service can turn negatives into positives
- COVID-19 is no longer an excuse and people want service to return to normal
- Shift to digital highlights importance of support for vulnerable customers
Impact of COVID-19 on Consumer Behaviour
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- COVID-19 has had a profound impact on people’s finances…
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- Figure 19: Impact of COVID-19 on consumer finances, 4-12 March 2021
- …and on their online and offline behaviours
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- Figure 20: Impact of COVID-19 on consumer behaviour, 16-22 April 2021
Financial Services Industry in Context
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- Banks and building societies lead the way for financial services companies
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- Figure 21: General impression of customer service offered, selected sectors, March 2021
- PCWs are held in high regard
- Investment firms have the lowest rating in financial services
- Older generations are more sceptical
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- Figure 22: General impression of customer service offered by financial services providers, selected sectors, March 2021
Most Important Factors in Customer Service
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- Getting the basics right
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- Figure 23: Most important factors in customer service, March 2021
- Protecting the vulnerable is a means to an end
- Accessibility is key
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- Figure 24: Importance of 24/7 assistance in customer service, by age and gender, March 2021
Channel Preferences in Customer Service
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- Prioritising the human touch
- The role of the email
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- Figure 25: Channel preferences in customer service, March 2021
- Take control of social media presence
- The potential of text messaging apps
- People have a few ‘go to’ channels they prefer, regardless of issue
Reactions to Poor Customer Service
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- Around half of customers have experienced poor customer service
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- Figure 26: Actions taken in response to poor customer service, March 2021
- Expect unhappy customers to react…
- …and take the opportunity to prove your credentials
- Majority of those who react take more than one action
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- Figure 27: Repertoire of actions taken in response to poor customer service, March 2021
- Recovery period could jeopardise good perceptions
COVID-19 and Customer Service
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- Banks took swift action to support household finances…
- …but consumers have moved on
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- Figure 28: COVID-19 and customer service, March 2021
- Perceptions of customer service during pandemic vary greatly
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- Figure 29: Impact of COVID-19 on customer service – CHAID – Tree output, March 2021
Attitudes towards Customer Service
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- Customer service channels must remain focused post-pandemic
- Shift to digital highlights importance of support for vulnerable customers
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- Figure 30: Attitudes towards customer service, March 2021
- Supporting the digital customer journey
- Balancing the risk of fraud…
- …with cumbersome security processes
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 31: Impact of COVID-19 on customer service – CHAID – Table output, March 2021
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