Millions of people across the UK want to see more action from banks and other financial providers in supporting their customers through the cost of living crisis, new research published today has found.
While the majority of people in the UK plan to cut back on both essential and non-essential spending, one in five (19%) people in the UK say they still plan to borrow more in the next 12 months to help them manage the rising cost of living – the highest in Europe.
Banks are now seen by more than half of UK consumers (57%) as having a duty to help people during difficult financial times, second only to the government (64%). Yet despite this, today’s the report, Banking on Banks, finds that two-thirds (64%) of people in the UK still think banks and other financial providers aren’t doing enough to help their customers during these difficult economic times.
The report published by CRIF, Europe’s leading provider of consumer and business credit information, surveyed thousands of people in countries across the continent including France, the Czech Republic, Italy, Germany, Slovakia, and the UK, to better understand their attitudes towards financial services and how providers can better meet their needs during the rising cost of living.
European consumers, when asked what banks and financial providers should be doing to support their customers:
- 40% said banks should be tailoring products and services to better meet the needs of individual customers
- 37% want to see banks proactively reach out to customers if they can help them save money on services like insurance or bills
- 25% want to see their bank improve their digital services
- 33% want to have more support from their bank on how to build up their savings
With recent innovations in financial services, including open banking technology, financial providers can better utilise customer data to build a more accurate picture of their creditworthiness, enabling better lending decisions with reduced risk.
This allows providers to go further in providing the services consumers are calling for including more accurate, personalised decisions in areas like lending; the ability to signpost people to more appropriate, potentially lower-cost, third-party services like utility providers; and offer advanced warning to customers of potential issues with their future finances.
However, trust in financial services among European consumers remains a key issue and is acting as a barrier to enhancing services and improving reputations. One in five (19%) worry that banks will attempt to sell them products which aren’t right for them, and a similar number (18%) feel they don’t have their best interests at heart.
When it comes to their data, over half (56%) of Europeans worry about how this information is used by banks and other providers, with consumers in the UK being the most concerned of all Europeans (63%).
This is despite an acknowledgement from consumers of the benefits data sharing can bring, with 35% of people in the UK saying they’d be prepared to share more of their data if it improved their ability to borrow or access higher credit limits. Nearly half (46%) said they’d be willing to share more information if it meant banks could warn them in advance of potential financial issues.
Sara Costantini, CRIF’s Regional Director for the UK & Ireland, said, “Millions of people across the UK are already contending with the increasing cost of living, with one in five now expecting to borrow more over the next year.
“Despite this, the majority of people in the UK feel lenders aren’t doing enough to help and want to see them offer more tailored products and services that meet their specific needs, as well as ways to lower their bills and to proactively flag any financial issues on the horizon.
“Innovations like open banking make this a possibility. The whole financial sector needs to work together to improve customer understanding and capitalise on the benefits improved data and analytics can bring. Only by doing so can we ensure more people get the services and support they need to weather these trying times.”