Customer Service Preferences in Financial Services - UK - May 2021
Overview
 
72% of customers believe that COVID-19 can no longer be used as an excuse for poor customer service and that opening hours should return to normal once the pandemic is over. This is not to say that the appeal of online channels hasn’t increased, but an indication that people expect a return to normality in the availability of traditional channels of customer service.

Although part of a long-term trend, lockdowns have accelerated the shift to digital and online channels in customer service. This is likely to continue and expand into further areas of consumer finance, but the pandemic has also highlighted the importance of securing access to the most vulnerable in society. 

However, financial services providers have by and large been hit financially by the crisis, and will eventually have to go through restructuring to adapt to the new normal. Unpopular decisions may be on the horizon, for example regarding the viability of running extensive branch networks while more customers are switching to online channels.

The long-term shift to online will see cost-effective ways of improving customer service, particularly when it comes to 24/7 assistance and speed of response. However, knowledgeable staff remains the main priority in customer service, and consumers will turn to telephone and in-person services when a serious issue arises. A hybrid approach of prioritising the time and training of expert staff with automated solutions that can direct customers to the right channel for their needs will be key in meeting customers’ expectations now and in the future.

Key issues covered in this Report
●	The impact of COVID-19 on consumer behaviours related to customer service
●	Market environment, including recent regulatory intervention
●	Perceptions of the customer service offered by different financial services sectors and comparable industries
●	Most important factors determining good customer service
●	Channel preferences in customer service for serious vs routine issues
●	Reactions to poor customer service
●	Attitudes towards customer service, including developments seen during the pandemic

COVID-19: market context
The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting on 23 March. It wasn't until 15 June that non-essential stores were allowed to reopen, 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 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 further in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the reopening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March, and with a hoped end to all restrictions by 21 June. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

The UK’s vaccination programme started on 8 December 2020, and with the Pfizer-BioNTech, Moderna and Oxford-AstraZeneca vaccines licenced for use in the UK, the government aims to offer a first dose of the vaccine to all adults in the UK by the end of July 2021. At the time of writing, the government is on track to meet this target, with over 57.8 million doses having been administered as of 19 May. However, the presence of the so-called Indian variant in the UK could pose a threat to the lifting of restrictions.

Economic and other assumptions
Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its March 2021 Economic and Fiscal Outlook Report. After the fall of 9.9% over the course of 2020, the scenario suggests that UK GDP will grow by 4% in 2021 and 7.3% in 2022. 

GDP isn’t expected to return to pre-COVID-19 levels until the second quarter of 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster than expected rollout of vaccines.

Unemployment is expected to peak at 5.9% in 2022. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

Products covered in this Report
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.