Consumers in both the U.S. and the U.K. describe the banking sector as “greedy and impersonal,” according to surveys from international public relations consultancy Cohn & Wolfe.
A study of 650 U.S. consumers conducted by online global research provider Lightspeed Research in conjunction with Cohn & Wolfe, shows the public has little trust in financial advisors, insurers, and other financial services companies. In fact, when asked to list words to describe financial institutions, “greedy” and “impersonal” were each selected by 32 percent of respondents, “opportunistic” was selected by 26 percent and “distant from me” was chosen by 22 percent.
Meanwhile, positive ranked low in the survey: “sympathetic” was selected by 3 percent of respondents; “transparent” was selected by 3 percent; “ethical” was selected by 5 percent; “honest” was selected by 10 percent; and “trustworthy” was selected by 13 percent. Respondents could choose more than one descriptor.
Further reflecting their lack of confidence in these companies, 66 percent of respondents said they do not believe the financial services industry will help them to ever regain the wealth they lost during the economic downturn. Only eight percent said they did expect such help; 27 percent said they didn’t know.
“Public perceptions about the financial services industry are terrible,” says Matt Wolfrom, executive vice president at Cohn & Wolfe. “But there is reason for optimism since the survey showed one key reason for the distrust is that these companies have simply not connected with consumers, who feel they need advice and information during these challenging economic times. Companies that engage with consumers will find their brands rewarded with more loyalty—and business.”
The survey found that consumer trust in financial institutions has dropped significantly during the past 18 months. Fully 67 percent of respondents said they had trust in the industry 18 months ago, but four in 10 of respondents said their trust had weakened.
The shift may explain why 59 percent of respondents said they would welcome increased regulation of banks and other financial institutions; 18 percent they would “greatly welcome” additional regulation.
U.K. consumers also perceive their banks to be “greedy” and “impersonal,” according to a similar survey 852 consumers in January. The study also revealed that 60 percent of consumers don’t believe that their bank is looking after their best interests.
When asked which words best describe the perception of their financial institution, consumers identified “greedy” (49 percent), “impersonal” (36 percent) and “distant” (34 percent). Positive descriptions including “ethical” (2 percent), “trustworthy” (4 percent) and “transparent” (5 percent) were again among the least common terms used by consumers to describe their financial institutions.
Furthermore, the survey shows that financial providers are neglecting communication in these testing times. Almost three quarters (74 percent) of consumers have not been contacted by their financial providers with advice on financial planning.
Ros Hunt, head of financial services at Cohn & Wolfe in London, says: “Given the broader economic climate and the crisis which has hit this sector, we anticipated seeing consumers report deterioration in trust. However, the depth of resentment surprised us, demonstrating how badly customers perceive financial organizations.
“We are also surprised that financial services businesses have not made more effort to engage with consumers. People need and appreciate guidance and offering it in difficult times will help win customer loyalty. We would urge banks to consider how they can use their expertise to help consumers manage their finances in these conditions.”
Almost two thirds (64 percent) of respondents said their trust in financial institutions had weakened over the last 18 months. A lack of confidence in banks was further emphasized, with 74 per cent of consumers saying that they do not believe that their bank would help them recover any money they had lost in 2008.