Just 25% of Consumers Trust Financial Brands To Act In Their Best Interest

Financial services brands invest heavily in ad campaigns they believe will build trust and give them an edge over their competitors. But what if they are all barking up the wrong tree?

Moneyzine.co.uk has analysed data showing a staggering lack of trust in financial institutions. And individual brands fare little better; even those with high levels of fame are generally not liked.

Financial services have a trust problem

A recent survey explored UK consumers’ attitudes towards the financial services industry. The results were conclusive: just 25% of consumers trust businesses in the industry to ‘act in their best interest’, and 31% actively distrust the industry. The only industry that fared worse was utilities, which 42% of people distrust.

However, there is a large variance in trust between different types of finance providers. While 42% of people trust Building Societies, just 8% trust Unsecured Lenders. Equally, Banks see a relatively high level of both trust (35%) and distrust (30%), suggesting they are particularly polarising.

Individual brands struggle to build trust

We might think the financial sector in general has a poor reputation, but individual brands can still build a positive image for themselves. However, this is not borne out by the data from a recent poll.

Brands like Barclays, HSBC and Aviva are all extremely famous - but still less than 50% of people report ‘liking’ any of those brands. In fact, of 49 financial brands included in a survey, just one was ‘liked’ by more than 50% of the people who recognised the brand. 42% of people had ‘heard of’ Hargreaves and Lansdown, and 23% said they ‘liked’ the brand. Compare this to JP Morgan, which 72% of people have heard of - but just 22% ‘like’.

So what can financial brands do?

Rather than building fame, finance brands would be better off focusing their energy on what consumers really care about. So what is it that keeps consumers from trusting financial brands?

According to one poll, the top concerns around finance are ‘becoming a victim of fraud of scams’ (53%), mishandling of personal data (43%), a ‘lack of protection when things go wrong’ (42%) and ‘firms going out of business' (40%).

Financial services brands therefore can’t increase trust the way many other brands might - by creating a positive public image through PR and advertising. Instead, they need to address fundamental concerns about how they operate.

Consumers were asked what would make them trust a finance provider, and their answers were striking. 54% said ‘improved consumer protection’, 49% cited ‘legal consequences for activities that lose customers’ money’ and 44% said ‘the industry meeting the costs of compensations when providers go bust’.

Financial services doesn’t have an ‘image problem’. Based on this data, it would appear the real problem for financial services is a lack of accountability.

Jonathan Merry, CEO of Moneyzine.co.uk