Customer Service Preferences in Financial Services - UK - 2022

OVERVIEW
Key issues covered in this Report
Market context
Products covered in this Report
EXECUTIVE SUMMARY
The market
The rising cost of living is hitting consumer confidence and driving the need for support
Figure 1: Consumer financial sentiment, 2021 and 2022
Widespread bank branch closures limit face-to-face interactions
Figure 2: Number of bank and building society branches in the UK, 2016-21
The consumer
Providers must be prepared for usage to grow as inflation spirals
Ensure security and fraud issues can be reported 24/7
Figure 3: Reasons for seeking assistance, 2022
Satisfaction is high but could be tested throughout the cost-of-living crisis
Figure 4: Overall satisfaction with financial services providers’ customer services, 2022
Banks must maintain high service standards or risk switching
Figure 5: Customer service satisfaction, by type of financial services provider, 2022
Branch closures could drive dissatisfaction further…
…but the shift to digital services can help reduce waiting times
Figure 6: Causes of dissatisfaction with financial services customer service, 2022
In-person service still plays a vital role for more complex issues
Figure 7: Contact preferences, by issue, 2022
Financial services providers must offer guidance on rising cost of living
Prioritise written records to boost customer satisfaction
The use of VR must go beyond one-off novelty experience…
Figure 8: Attitudes towards customer services, 2022
ISSUES AND INSIGHTS
Address concerns over rising cost-of-living to maintain satisfaction levels
Be proactive in offering advice to boost financial education
Tailor services to help advice younger customers…
…or risk complaints and account closures
Expectations over levels of digital service will grow as more branches close
Raise awareness of video appointments and expand availability
Utilise appointments and written records of communications
Use rapid-response premium customer service as a perk of fee-paying accounts
MARKET DRIVERS
Highest inflation levels in 40 years placing strain on household finances
Prioritise those who are struggling financially for customer service support
Figure 9: CPIH and CPI, 12-month rates, 2019-22
The rising cost of living is hitting consumer confidence
Figure 10: Consumer financial sentiment, 2021 and 2022
Energy crisis tops the list of consumer financial concerns
Rising grocery prices becoming a major concern for many households
Figure 11: Factors impacting financial situation, 2022
COVID-19 accelerated the shift to digital customer services
Widespread bank branch closures limit face-to-face interactions…
…but customer service needs to retain some personal interaction
Figure 12: Number of bank and building society branches in the UK, 2016-21
Unaffordable lending is a key customer complaint
Figure 13: New complaints to Financial Ombudsman Service, by sector, 2021
REGULATORY AND LEGISLATIVE CHANGES
FCA’s Consumer Duty will have important implications for customer services
National Insurance rate rises 1.25 percentage points
Student loan interest rates are set to rise in England and Wales
Government updates financial support following energy cap rise
FCA adapts guidelines as more bank branches close
COMPETITIVE STRATEGIES AND INNOVATION
Financial services providers increasingly focused on the cost-of-living crisis
Branch closures continue at a rapid rate
Some retained branches are reducing operating hours
Nationwide states it will keep branches open to help with the cost-of-living crisis
Shared hubs will help retain access to basic banking services
Wide-ranging digital banking services will be vital as branches close
Expansion of video chat could help to provide guidance on the cost of living
HSBC UK expands video support for investment advice
NatWest looks to social media influencers to engage younger audience
Fintech Frost launches app focused on cost of living
AWS works with NatWest for data-driven services
USE OF CUSTOMER SERVICES
Providers must be prepared for usage to grow as inflation spirals
Ensure security and fraud issues can be reported 24/7
Be proactive with product and service information
Figure 14: Reasons for seeking assistance, 2022
Tailor communications to engage younger adults
Figure 15: Consumers selecting ‘none of these’ reasons for seeking assistance, by age, 2022
Younger adults need wide-ranging customer service
Figure 16: Repertoire of reasons for seeking assistance, by age, 2022
CUSTOMER SERVICE SATISFACTION LEVELS
Satisfaction is high but could be tested throughout the cost-of-living crisis
Figure 17: Overall satisfaction with financial services providers’ customer services, 2022
Older consumers are the least satisfied with customer services
Satisfaction of younger demographics will be tested as need for support grows
Branch closures could hit satisfaction amongst older consumers
Figure 18: Overall satisfaction with financial services providers’ customer services, by age, 2022
Online mobile wallet issues must be rapidly resolved to maintain satisfaction
Banks must maintain high service standards or risk switching
Figure 19: Customer service satisfaction, by type of financial services provider, 2022
DRIVERS OF DISSATISFACTION IN CUSTOMER SERVICES
Branch closures could drive dissatisfaction further…
…but the shift to digital services can help reduce waiting times
Shared hubs could address consumer desire for in-branch experiences
Figure 20: Causes of dissatisfaction with financial services customer service, 2022
Prioritise 24/7 assistance to reduce dissatisfaction among younger consumers
Older generations more likely to be dissatisfied with lack of physical branch
Figure 21: Causes of dissatisfaction, by age, 2022
CONTACT PREFERENCES FOR CUSTOMER SERVICES
In-person service still plays a vital role for more complex issues
Prioritise phone service for dealing with security issues and fraud concerns
Providers must raise awareness of video chat as branches close
Figure 22: Contact preferences, by issue, 2022
Flexible contact options for advice are vital to cater for all age groups
Traditional methods dominate but providers must boost awareness of video calls
Figure 23: Method of contact for financial advice, by age, 2022
CUSTOMER SERVICE AND THE RISING COST OF LIVING
Financial services providers must offer guidance on rising cost of living
Proactive support will be key in helping people navigate the rising cost of living
Financial services providers can boost financial education through multichannel events
Figure 24: Advice on inflation and the rising cost of living, by age, 2022
Prioritise customer service for vulnerable customers
Figure 25: Support for those struggling financially, by age, 2022
ATTITUDES TOWARDS CUSTOMER SERVICE EXPERIENCE
Younger demographics are more proactive when it comes to dissatisfaction
Figure 26: Making formal complaints, by age, 2022
Figure 27: Account closures, by age, 2022
Personalise chatbot interactions to better engage with customers
Figure 28: Resolving issues with chatbots, by age, 2022
ATTITUDES TOWARDS CUSTOMER SERVICE INTERACTION
Prioritise written records to boost customer satisfaction
Provide customisable options for records of communication
Figure 29: Written records of customer service, by age, 2022
Providers must offer simple options to book and edit appointments
Figure 30: Bookable appointments, by age, 2022
ATTITUDES TOWARDS THE FUTURE OF CUSTOMER SERVICES
Create engaging VR propositions to engage young consumers
Financial services companies are starting to look into the metaverse
The use of VR must go beyond one-off novelty experience…
…and look to boost headset ownership
Figure 31: Virtual reality customer services, by age, 2022
Fee-paying premium customer services can help boost 24/7 support
Premium support could capitalise on the technological engagement of younger demographics
Use premium customer service to drive interest in fee-paying current accounts
Figure 32: Premium rapid-response customer service, by age, 2022
Utilise third-party apps to promote rapid service for younger consumers
Figure 33: Using third-party apps to talk to financial services providers, by age, 2022
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology