NEWS23 November 2021

Pounds and pence: Key takeaways from the Financial Services Summit

Finance News UK

Finance is one of the world’s biggest industries and governs large parts of our lives. How can insights help explore attitudes towards and within the sector? The Market Research Society’s financial services summit last week explored some of the research coming out of the industry.

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Give customers a voice
In the aftermath of the 2008 financial crisis, NatWest was government-run and had lost substantial trust from its customers. The bank had been three hours away from running out of money in its cash machines during the crisis, and was seen as the least trusted company in the least trusted sector.

The company’s recovery hinged on a new strategy, and insights played a substantial role in helping NatWest ensure the strategy would be understood and implemented at all levels of the business. Paul Smith, director of customer insight at NatWest, said that the insight team implemented a new three-point plan: listen to customers, learn from what they are saying and act upon their insights.

This was done through a new Net Promoter system, which allowed frontline colleagues to have direct access to insight and voice of the customer data. The system measures how customers feel about NatWest, how it compares to competitors and which parts of customers’ interaction with the bank work best. The data is also used by the firm’s analytics team to better understand its customers.

“Lots of companies to listen to what customers are saying,” said Smith. “It is very hard to go that extra step to listen and learn from what they are saying.”

Understanding cash
The Financial Conduct Authority and Savanta published a report earlier this year examining attitudes to a cashless society, and why some people were reluctant or unable to move from cash to card, digital or other electronic or cashless forms of payment. The report was based on focus groups, in-depth interviews and also paired interviews with respondents and a carer, or charity worker, including 100 people in total.

Max McEwan, associate director at Savanta, said that “older people relied on cash often due to poor digital skills or ingrained behaviour. For younger people, cash reliance was more due to managing on a lower income.”

He added the main drivers of continued cash use were avoiding overspending, ingrained habit and distrust of alternatives. “We found cash was used as a budgeting approach; it helped people to keep track of their money and keep track of their spending in day-to-day interaction,” McEwan said. “Cash was the default approach for some people – they did not see why they should change their habits of a lifetime.”

Avoid stereotypes
Lloyds Banking Group and Ipsos Mori had set out on a project to examine the use of stereotypes and tropes in advertising, and examine how minority ethnic consumers rated the bank’s communications.

The research found that ethnic minorities felt that Lloyds Banking Group was trying hard to include more ethnic minority voices in their advertising and brand communications, especially at Halifax bank. But consumers felt some more progress could still be made.

Monique Centrone, UK semiotics lead at Ipsos Mori, said that increasingly younger people expected brand communications to represent them, their family and cultural backgrounds in a more positive light. “There is a desire among ethnic minority people to have realistic, multi-dimensional and positive versions of themselves reflected,” said Centrone. “People want to defy stereotypes.”

This needed to be translated into all forms of brand communications. “It is important to think about how people are represented,” said Centrone. “That means a move from being passive in reflecting to being active in championing and defying stereotypes and breaking tropes.”

The result was a set of guidelines in communications, including to present people as they would like to be seen, look at intersectionality, think about the detail of how people present themselves, be careful the language does not reinforce stereotypes and examine social status references in communications.

Protecting income
Kathy Ellison, director at Savanta, discussed research with insurance firm Legal & General on people’s attitudes to savings versus income protection insurance. The research found a generational split in how people would approach mitigation in case they lost their source of income for a sustained period.

“The younger you are, the more likely you are to think you can save your way into a solution,” said Ellison. “The older you are, the more likely you are to realise that perhaps insurance could be a solution.”

The research run by Savanta and Legal & General found that the average household in the survey had £2,700 in savings, but felt that £12,000 was needed to feel financially secure. Two in five households had less than £1,000 in savings, and one in five had no savings at all.

“It would take the average working household four years to save what they felt they would need to feel secure,” Ellison added. “More worryingly it would take 12 years to save enough to cover a year’s living expenses, or 14 years to cover their gross salary. These are not numbers consumers are thinking about when they say they are relying on savings to see them through.”

Charlotte May, group head of customer research at Legal & General, added the research had “helped articulate and quantify the size of the challenge, but also the opportunity that advisers have to genuinely help demonstrate to people their real vulnerability and using data and insight to help illustrate the critical role that having concrete plans can have in their daily lives”.

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