Consumer confidence in financial services providers is high, Toluna shows

There has been a rise in consumer confidence in the financial services sector since 2019, with high street banks and building societies leading the charge, Toluna Financial Services Sentiment Indicator has highlighted.

The Toluna Financial Services Sentiment Indicator is a quarterly study exploring key financial services issues in the UK and the consumers they serve. The latest research surveyed 1,102 respondents.

Key findings include:

• 55% of people surveyed had confidence in banks/building societies, an increase of 9% compared to 46% in December 2019;

• Insurers, credit card providers, the FCA, and the Bank of England have all seen confidence levels increase by 4-6 percentage points throughout 2020;

• Confidence in online-only banks is strongest amongst 18-34-year olds (42%) and weakest amongst those aged 55+ at 29%;

• The biggest rise in confidence in online-only banks occurred amongst 35-54-year-olds, increasing from 31% in August 2020 to 39% in November 2020.

Furthermore, people in the UK believe banks, building societies, and credit card companies have worked hard to protect their most vulnerable customers throughout the COVID-19 pandemic.

• 42% of respondents agreed that vulnerable customers are adequately protected by financial services providers, compared with 33% before the pandemic in February 2020. This feeling is higher amongst those who are classed as being in financial difficulty, defined as having failed to pay a bill or loan/credit card repayments in 3 of the last 6 months (60%), and those that have been furloughed (58%) from their employment.

• In a year when payment holidays were put in place to support customers, 27% of those surveyed said that they feel credit card interest and mortgage interest are fair, both rising 6 percentage points since pre-pandemic in February 2020.

With significant online activity remaining the norm, people are continuing to show greater willingness to engage with online financial services and products.

• 48% of those surveyed said they’d like to do more online when it comes to managing their financial services and products, compared to 42% in February 2020;

• 55% of respondents agreed that they are familiar with online-only financial services companies, up from 46% pre-pandemic in February 2020. The largest uplift was seen amongst 18-34-year old’s, rising by 10% from 57% in February 2020 to 67% in November 2020;

• Nearly two thirds (63%) of people are happy to manage all their financial products and services online, an 8%-point increase from February 2020; 

• Unsurprisingly, 18-34-year olds are the most receptive to managing all of their products and services online, and 55+-year-olds are the least receptive;

• The increase is being driven by 35-54-year olds and 55+-year-olds, with 10% and 7% increases from February 2020 to 2020 November, respectively.

Digital banking has accelerated since the pandemic began, with contactless digital payments a favoured choice among UK consumers.

• Almost a third of those said they don’t need physical payment cards as they use their mobile phone for purchases, rising from 22% agreeing with this pre-pandemic;

• 51% of 18-34-year olds agree that they do not need physical payment cards compared to 10% of 55+-year-olds. Again, the greatest increase from February 2020 to now is seen amongst the 35-54 year-olds, rising from 22% in February 2020 to 33% in November 2020.

• When asked, 37% of respondents said that they’d be lost without their mobile phone and it would be much more difficult for them to pay for items, which is an 8% point increase on the 29% feeling this pre-pandemic.