Confidence in banks ‘improving’
THE UK banking industry lags most global markets in terms of restoring trust, but, after years of decline, consumer confidence in the banking system is stabilising,
Despite this improvement, banks are still struggling to build brand loyalty, the EY Global Consumer Banking Survey, said.
In the low interest rate environment, consumers are highly price-sensitive and increasingly likely to change their banking provider because of rates and fees, EY said.
The firm surveyed 32,000 banking customers across 43 countries, including 767 consumers from the UK. The interviews took place in the autumn of 2013.
Almost two-thirds of UK consumers said their confidence in banks decreased in both 2011 and 2012. But in 2013 confidence began to stabilise. 52% of consumers said their level of confidence had not changed; 37% said their confidence decreased; and 11% said confidence increased – broadly double the percentage who said their confidence increased in 2011 (6%) and 2012 (5%).
Omar Ali, UK banking and capital markets leader, said: “After hitting rock bottom in 2012, consumers’ confidence levels for 2013 show a massive improvement.
“This is largely due to the improving economy and increased financial stability, but is also a reflection of the steps banks are taking to deal with legacy issues and to improve customer experience. However, we can’t get ahead of ourselves. Confidence levels are stabilising, not increasing, and banks still have a lot of work to do. Confidence and trust in UK banks lags most markets globally, including the US, who arguably suffered a comparable crisis.”
Penney Frohling, financial services strategy lead in the UK for EY, added: “Consumers are more interested in their own financial well-being than in the reputation of an individual bank and are increasingly voting with their feet over fees, rates and charges. Despite the energy being put into rebuilding trust at all major retail banks in the UK, improving trust is not (yet) converting into business benefit for banks.”
In the UK, 90% of customers rank convenience as the most important aspect of customer service, followed by security (78%), rates and fees (66%), relationship (66%) and personalisation or consultation (62%).
