March 29th, 2023, Stephan Shakespeare
In July 2023, the FCA’s Consumer Duty will come into effect. Among its stipulations are rules requiring banks to deliver value for money, communicate more transparently, and overall do more to meet customer needs and deliver the service they require.
According to YouGov BrandIndex, the public are broadly positive about their banking experience across the sector; on average, 72% of customers over the past 12 months rated their providers positively. But while 48% said their institutions provided positive value for money, 47% were neutral and 5% were negative. For perceptions of quality, a mere third (33%) were positive, with the remainder neutral (60%) or negative (7%).
Our data shows that nearly two in five consumers (36%) say that value for money is an important consideration when choosing a bank – right after trust (43%). So there could be room to improve these sentiments from a commercial and regulatory perspective. Other factors such as digital accessibility (33%) and customer service (33%) are also among the top motivations chosen by customers.
Evidence suggests that a portion of British consumers are unhappy with how banks are performing in some of these areas. While half (52%) say they trust banks and building societies, a quarter (26%) say they do not – and a third of consumers (34%) actively think banks try to trick them out of their money, with two in five (42%) believing the opposite. Perhaps most tellingly, seven in ten (72%) think all banks are “basically the same”, which could suggest that not enough is being done to differentiate them in terms of products or service.
It's easy to view Consumer Duty as a stick for banks but there is plenty of carrot here too, given how much of the public views them as untrustworthy, interchangeable, or outright devious. If they change these perceptions – whether out of a sincere desire to do better by their customers or fear that they will run afoul of the regulator – banks stand to benefit.