71% of consumers like to keep a written record of communication with financial services providers. Hence, as customer service interactions increasingly take place digitally, eg via live chat, it is important that follow-up transcripts are available to customers as reassurance that they have fully understood the information provided. This will also enable providers to identify repeat issues and reduce friction in the customer service process.

Unprecedented levels of inflation and surging energy bills are having an impact on household finances and this will see more turning to financial providers’ customer services. For many this will be for new or additional access to credit in order to navigate the cost-of-living crisis. There is also a need for proactive guidance and advice from customer services, particularly amongst less financially experienced younger people. While 52% say they would like financial companies to advise them on the impact of inflation and rising living costs, this reaches a peak of 73% amongst 18-24 year olds.

Branch closures represent the main threat to customer services in financial markets. Closures have continued at a rapid rate in 2022, despite in-person communication remaining a leading choice for more complex customer issues. The lack of physical branches is the second biggest driver of dissatisfaction with customer services, after waiting times to talk to advisors. Providers must ensure the shift to digital services helps solve the issue of waiting times while continuing to offer all the benefits of a branch. This will require further rollout of video appointments alongside campaigns to raise awareness of the technology.

The cost-of-living crisis will be an opportunity for customer services to take a proactive approach to boosting financial education. In such a dynamic environment, people will need additional support and advice on managing finances and finding the most suitable financial products. In addition, the rising expectations of 24/7 customer service can provide an opportunity to offer premium options. For banks this could be used to drive interest in fee-paying current accounts, particularly amongst younger demographics where 45% of 18-24s say they would pay for rapid-response, 24/7 customer services. As more branches close, that constant digital support could provide a vital source of reassurance.

• The impact of the rising cost of living on financial services providers’ customer services.

• Consumer use of customer services and satisfaction levels.

• Drivers of consumer dissatisfaction with customer services.

• Consumer contact preferences for financial services providers’ customer services.

• Attitudes towards customer service experience.

• Attitudes towards the future of customer services and innovations.

At the start of 2020, COVID-19 caused massive economic disruption, and UK GDP fell by 9.4% over the course of the year. There was further severe disruption throughout 2021, but the economy did make up much of 2020’s lost output, and the Office for National Statistics estimates that UK GDP grew by 7.5% in 2021.

In its March 2022 Economic and Fiscal Outlook report, the Office for Budget Responsibility (OBR) revised its forecast for growth in UK GDP to 3.8% for 2022, down from the 6% forecast in October 2021. This more pessimistic outlook has been driven by the sharp rise in inflation and the impact this will have on consumer spending. CPI reached 9% in the 12 months to April 2022, and is expected to rise further before the end of the year.

Rising prices will lead to a historic drop in real incomes, and put consumer spending under pressure. This is reflected in the OBR’s latest forecast for 5.4% growth in household consumption in 2022, 4.4 percentage points lower than it projected in October. Mintel’s tracker data shows that an increasing proportion of consumers across Europe are concerned about the impact of rising prices on their household finances and there are signs of consumers already taking a more cautious approach to spending.

The rising cost of living prompted the government to announce a new package of support measures for consumers on 26 May 2022. The measures include a £400 rebate on energy bills, and a one-off £650 “cost of living payment” for households who are in receipt of welfare benefits.

There is more positive news in the labour market. The unemployment rate for the three months to March 2022 was 3.7%, while provisional payroll data for April 2022 indicated that there were 29.5 million employees in the UK, up 530,000 on pre-COVID-19 levels. The OBR expects unemployment to remain relatively level at around 4.1% for the duration of its five-year forecast period. There is, however, still the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors, and data on the self-employed and economic inactivity is less positive than the headline unemployment rate.

The human cost of the conflict in Ukraine, including the horrifying number of civilian deaths and injuries and the growing migration crisis, is at the forefront of consumers’ minds. However, the economic impact is also a growing concern. In particular, soaring energy prices and the impact of sanctions will have a strongly inflationary impact. Mintel research conducted in early May shows that 74% think that the conflict will have an impact on their household finances, and more than two thirds of Brits expect the conflict to result in higher prices.

The conflict in Ukraine means that the economic outlook is particularly uncertain, and the OBR has made it clear that it is too early to gauge the full impact it will have on national economies. As such, independent forecasts are very likely to change rapidly throughout the year as the situation changes.

This Report examines consumer preferences and attitudes towards customer service in financial services. Although the main focus is on retail banking, sectors and providers covered by the scope of this Report and by Mintel’s exclusive consumer research also cover credit card brands, insurers, price comparison websites and direct-to-consumer investment companies.