Opinions on trust within the financial world reflect a positive trend, according to the ‘Fairer Finance Trust in Banking Index’ from Fairer Finance, the independent consumer group and rating provider. This comes as a surprise as complaints to the Financial Ombudsman Service have also seen a rise in recent times – especially with issues surrounding current accounts and credit cards.
The rise in complaints is shocking as over eight in 10 people have reported that they either ‘agree’ or ‘strongly agree’ that they trust their financial service providers (82 per cent for current accounts and 81 per cent for credit card providers). However, this level of trust is not equal for all financial service providers. Challenger banks were by far the more trusted according to the index.
Breaking it down, Fairer Finance found that Starling Bank led the way in terms of consumer trust with 61 per cent strongly agreeing that they trust the neobank. Starling’s competitor Monzo also saw the majority of its consumers express trust (56 per cent). Nationwide was the only high street incumbent that saw similar levels of trust (52 per cent) as its neobank counterparts.
Interestingly, First Direct (56 per cent), the sister brand of HSBC, had a positive response in terms of trust while HSBC was the worst-performing bank. Only 31 per cent of its consumers said they ‘strongly agree’ that they trusted the bank. Poor customer service was a primary reason for dissatisfaction.
Natwest’s trust score took a hit in 2023, possibly due to the Nigel Farage debanking scandal.
Banks must do more to meet Consumer Duty standards
James Daley, managing director at Fairer Finance
Commenting on the index, which has been tracking consumer trust across all banks and their products including mortgages, savings, and current accounts since 2015, James Daley, managing director at Fairer Finance, the consumer group and ratings provider, commented: “The FCA’s new Consumer Duty should be helping to close the gap in service between the challengers and the big high street banks.
“These new rules mean that all banks need to prove they are working to deliver good outcomes for their customers. But if anything, the gap is getting wider. Nationwide continues to be the one organisation with a major high-street presence that achieves trust ratings in the same ballpark as the challengers. Its popular advertising campaigns and commitment to its branch network are continuing to drive trust in the brand upwards.
“These latest results suggest that most banks still have plenty to do to meet the requirements of Consumer Duty, and turn their customers’ perceptions around.”
Is there a certain age group that is more trusting?
Tracking 10,000 consumers’ views twice yearly, Fairer Finance has also found that younger consumers aged 18-30 are most likely to trust their current bank (87 per cent agree or strongly agree that they trust their bank, compared to 82 per cent for all respondents and 82 per cent for over 65s).
This is driven in part by younger customers using challenger banks more. However, the major cause seems to be that banks are doing better at fulfilling the preferences of 18–30-year-olds. This demographic places relatively more importance on apps and websites and relatively less on bank branches.
The most trusted banks were also rated highly for:
slick digital services across websites and apps
good levels of communication with their customers (at the right time and through the right channels)
good reliability
The customers who say they are least confident in managing money are less trusting of their bank.
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