More than half of consumers do not trust financial services providers
Trustpilot, a leading customer review platform with 42 million reviews of 210,000 businesses, has released the findings of a month-long consumer behavior and sentiment study on the finance industry.
Citing reputational issues, more than 50 percent of consumers stated they didn’t trust traditional financial institutions, such as retail banks, mortgage lenders, and personal loan providers, while 45 percent of respondents felt the industry as a whole was less trustworthy than it was five years ago.
In addition to investigating trust and reputation, the study looked at how receptive 15,000 consumers were to various types of financial services marketing, producing the sharpest disparity of the study. While consumers favored minimal fees and low cost messages, beating ease of applications/processes, security, and convenience, 55 percent said reputation and customer service were the most important qualities for finance companies – even more important than the cost of financial services themselves.
“These numbers should be a concern for UK financial services firms interested in pursuing the opportunities offered by Open Banking,” said Alan Duncan Marketing Director, Europe at Trustpilot.
“Our previous research found Open Banking provides a £1 Billion opportunity for the UK economy but that depends on consumer take-up. The numbers in this major consumer survey suggest the industry still has a lot of work to do in order to build the trust required for consumers to feel comfortable sharing additional data. ”
The research also found consumers were overwhelmingly unwilling (85 percent) to let banks share their financial data with third parties, even if it led to tailored offers and decreases in fees and interest rates.
A prior study from Trustpilot and the Center for Economic and Business Research showed sharing of consumer data, as proposed in the U.K.’s Open Banking initiative, could generate as much as £1 billion in economic gains annually and 17,000 new jobs, but not if consumers reject the proposal.
Other research findings include:
- More than 40 percent of respondents considered fintech companies “very trustworthy”, sharply contrasting other finance sub-industries (personal loan providers, mortgage lenders, insurance companies).
- 42 percent of consumers used third-party reviews to find out whether a finance company is trustworthy or not; the next most-used channel was a company’s website (19 percent).
- Only 8.3 percent of consumers said they used social media to evaluate a finance company’s trustworthiness.
- 39.8 percent of consumers found video advertising most engaging, with social media advertising a close second (36.9 percent).
Trustpilot conducted the month-long poll on all of its English-language domains, some of the most trafficked consumer destinations in the world with more than 180 million visitors annually and billions of review impressions per month.