A report by PricewaterhouseCoopers (PwC) revealed that as consumers grow frustrated over poor services and incessant scandals of banks, insurers, fund managers and other financial services, there is a bigger problem that begs to be addressed – the sense of apathy that prevents immediate action.
PwC’s latest report, How financial services lost its mojo – and how it can get it back, is a survey of over 2000 people across the UK that shows that despite how low trust in financial services companies has sunk, switching levels remain low. According to the study, this is the worst possible state of affairs for incumbents – having a customer base that is both unresponsive and potentially volatile is the worst possible state of affairs for existing financial services providers.
The data show that while almost half (49%) of the respondents believe regulation of the financial services sector has been strengthened in the wake of the crisis, a greater proportion (57%) do not believe regulatory reforms that have been implemented are enough to ensure history will not repeat itself.
However, the prevailing sense of apathy seems to be driven by issues about the financial services sector that are more fundamental and broader than regulation. In the table below, the results show that consumers are more concerned with value-for-money, service quality and trust issues.
This is further substantiated through generally low scores on the vast majority of questions and the combination of low trust scores and inertia. For example, while only 32% of people trust their retail banks, only 11% have changed their current account provider in the last year. With switching levels relatively low and relatively high trust in banks to hold customer data, there is an opportunity for banks to reconnect with their customers.
“Tackling this apathy must be an over-riding priority for all financial services companies. Those who don’t change now, and those who don’t make the right changes, risk going further down the road where the people they are trying to reach have stopped listening and will only pay attention again when something genuinely different comes along,” said George Stylianides, Financial Services Risk and Regulation Leader at PwC.
The survey suggests that consumers’ lack of trust is affecting all financial services sectors, not just banking, reflecting a generalised dissatisfaction across the industry. It also deduced that even if the trust in the industry may have been seriously eroded by crisis and scandal, the residual confidence might be regarded in a more positive light.
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