More than half (55%) of consumers of retail financial services in the United Kingdom expect standards of service from banks and insurers to be higher than they are. The remaining 45% do not have lower demands; they just have lower expectations. In fact, the new report from market analysts Datamonitor that includes these startling assertions also found that more than two out of five UK consumers have experienced bad service from their primary financial services provider in the last 12 months and almost nine in ten do not feel valued.
As Datanmonitor points out, banks and insurers have their work cut out to bring honesty and simplicity into their brands. Up to 60% of the UK’s white-collar population feel overburdened and would welcome less complicated products and less hassle from their bank. Datamonitor points out that this will only be possible in a competitive environment if bankers and insurers are able to make contact more personal and improve the accuracy of direct marketing. The firm adds that, as a large majority among consumers is not willing to pay up for improved service or time-and-effort saving services, only the top innovators in the financial services market will be able to respond to these needs.
Financial Services providers have a lot to live up to in order to meet current consumer expectations on service – with 55% of UK consumers expecting superior levels of service in their relationships with banks and insurers, consumers are more demanding than ever. The remaining 45% do not have lower demands; they have lower expectations. They believe that financial services companies will not give them any more than adequate service.
Experiences of bad service among financial services consumers are extremely frequent. An overwhelming 43% of consumers have experienced bad service from their primary provider in the last year. And, these frequent mishaps have already led to a bad service image for the financial services industry. A staggering 87% among consumers do not currently feel entirely valued by their primary financial services provider, and among them, 15% do not feel valued by their primary provider at all. “This does not paint a very positive picture in terms of current service levels amongst financial services companies, yet this situation leaves considerable scope for companies who can deliver in excess of expectations and will thus gain the appreciation of these disillusioned customers, ” says Gunter Seymus, Financial Analyst at Datamonitor and author of the report.
Few customers, however, are willing to pay for the improved service they want. Some 41.5% of consumers expect excellent customer service to come part and parcel of the offering and at no extra fee while only 13% of consumers expect to pay for the superior levels of attention they demand.
Not only is a relatively small but fast-growing growing group of consumers quitting the rat race and shifting back, a considerable portion of white-collar workers are craving for new ways in which they can simplify and de-clutter their lives while staying in full-time employment. Datamonitor estimates that, down-shifters make up more than 2 million people in the UK at present, and the wider trend for simplicity could affect some 9.7 million people, or 60% of white-collar workers in the UK.
These cash-rich, time-poor workers and young parents with difficult work-life balances and hectic homes form a strong opportunity for mainstream banks. These consumers are practically begging them to issue one-stop-shop products that require little but uncomplicated literature that is trustworthy and does not crowd their mind with unnecessary information and options. “Complicated regulation and information overload is of course beyond the power of banks, but there is a lot they can do to make their product setups less complex, target their direct communications better and avoid impersonal advice,” comments Seymus.
Again, some of these may be costly and not many consumers are willing to pay extra to providers that offer products and services that can save time and effort. Almost 60% of consumers see the benefit of reducing the number of financial contact points they deal at, but only 36% would be happy to pay extra for services that make this happen, for example product-aggregating websites.