Results taken from Maru/edr’s Financial Services Treating Customers Fairly report.
Trust is the biggest driver of consumer decision making when it comes to financial services. Maru/edr research from just last month revealed 62% of consumers cite trust as the most important factor when considering which provider to open an account with.
Yet the financial services industry is one of the least trusted consumer sectors – Edleman’s Trust Barometer shows that financial services is consistently rated the least trusted sector amongst a global audience.
It’s no surprise then that just half (52%) of respondents who took part in our recent research into the Financial Conduct Authority’s (FCA) Treating Customers Fairly policy and principles believe that the financial services industry treats consumers fairly.
The real cost of a lack of trust
Our research highlights a clear disconnect between financial services operations and the FCA’s Treating Customers Fairly initiative. Introduced in 2006, the policy aims to deliver improved outcomes for retail financial services customers by monitoring through principal based regulation the need for providers to place the customer at the heart of their respective operations and business culture.
Retail banking firms are now regularly monitored on their customer policy and the FCA are increasingly taking an active approach to ensuring retail banks and beyond meet their customer policy commitments. Financial Service Providers are at risk both financially and reputationally if they do not have a clear strategy focused on delivering against these regulatory requirements that should form part of their company culture. In fact, the FCA has issued over £2.5million in fines for the unfair treatment of customers in the last two years alone.
Placing customers at the heart
The most effective and efficient way to place customers at the heart of an organisation – and deliver against the FCA’s initiative – is through regular and consistent Voice of the Customer feedback.
Voice of the Customer (VoC) programmes allow financial service providers to intelligently gather feedback from customers at the right time and in the right way to effectively measure performance against the FCA’s six guiding Treating Customers Fairly (TCF) principles.
Yet, alarmingly, our research indicates that less than half (45%) of those surveyed have been asked to take part in a structured feedback process for their bank or financial institution in the past 12 months.
Giving customers a voice
However, 84% of retail banking customers would be willing to provide their feedback if given the chance. Our research suggests the financial services industry is missing a huge opportunity to demonstrate both their commitment to the fair treatment of customers and to reach out to customers to shape propositions, services and customer operations.
Since the launch of the FCA’s TCF policy, and during turbulent market conditions consumer expectations have evolved – there’s an appetite to provide feedback and for customers to increasingly have a voice. The growth of review sites is testament to this. Customers want and expect their voice to be heard and to influence change – whether that’s via improved service, streamlined processes or product development.
It’s why providing customers with a structured feedback mechanism can have such a positive impact on brand perception – especially in an industry that struggles more than most with consumer trust.
Getting the most value from a VoC investment
We often find that the most successful VoC programmes are the ones that truly embed feedback through every part of an organisations business – from frontline operations through to strategic decision making. In fact, most Maru/edr clients see a return on investment in less than one year thanks to our Voice of the Customer research best practice support and guidance.