The Financial Services Compensation Scheme (FSCS) has published a report on consumer trust in financial services. In the report, the FSCS presents the findings of some new and unique research, which identifies the biggest ‘trust gaps’ in the UK financial services industry.
In summary, the report explains how trust in financial services is low; globally it is the second least trusted industry and only 35% of UK consumers state they have trust in financial services firms. Low trust is primarily a reputational issue. Consumers believe that firms are capable of acting in consumers’ interests but choose instead to act in their own interests. Despite this, financial services firms are highly trusted in some areas, particularly around safety and security.
The report makes four recommendations on the most effective steps that can collectively be taken to restore consumer trust. These are:
- First, the finance industry needs to tackle distrust and a particularly poor reputation with regards to fair pay and not excessively rewarding senior staff.
- Second, firms should act transparently in customer’s best interests by offering the same deals to both new and long-term customers.
- Third, firms should tell customers when they would be better off with another product.
- Finally, the finance industry and FSCS should collaborate to raise awareness of existing protections, especially in regard to compensation for poor advice, in order to raise confidence.