Nationwide is Britain’s most trusted financial service company according to a new online YouGov survey commissioned by integrated marketing communications agency Baber Smith.
The Insight Survey by Baber Smith, which this year explores consumer trust in the retail and financial services (FS) sectors, reveals Nationwide as the most trusted financial services company in Britain with 15% of consumers rating it as one of their top three most trustworthy financial services companies.
Co-operative Bank (12%) and Barclays (10%) complete the top three most trusted companies within the FS sector.
Northern Rock and Admiral Insurance came out bottom of the survey with just 1%. Dark times ahead for financial services companies?
The Insight Survey paints a rather bleak picture for many financial services companies with a worrying lack of trust amongst consumers.
Out of the 20 companies listed, 12 score a trustworthy rating of 5% or less, including Aviva (5%), Tesco Finance (4%) and M&S Money (4%).
Furthermore, Baber Smith’s research found that there’s a strong correlation between trust and actual usage, with consumers very reluctant to trust financial services companies they don’t use.
Customer trust There is however good news for Co-Operative Bank, which is ranked the top financial services company for gaining the trust of its customers, with 57% of its users selecting the company as one of their top three trustworthy financial services companies. Nationwide comes a close second with 53%, followed by First Direct (49%) and Britannia (47%).
Interestingly, since three of the top four companies aren’t shareholder owned, it suggests that the stakeholder-led approach has a large part to play in gaining customer trust.
Reputation is key, but is advertising the answer? A ‘Good reputation’ and ‘Good customer service’ are the two most commonly cited reasons for trusting financial services companies, being important to 51% and 49% of consumers, respectively.
Although having ‘Appropriate financial products for me’ was the third most important reason, it rated much lower (28%) than the big two.
Lesser still were factors such as ‘Knowledgeable staff (19%), ‘Ethical business practices’ (17%) and ‘Low charges’ (12%). Marketers may be surprised to see ‘Live up to the promises in their advertising’ relatively low on the list with only 11% of consumers stating it was one of their top three reasons for being trustworthy.
Rise of the retailer? While you might assume that most people would think a traditional financial services company would be best placed to look after your money, the survey in fact reveals that only 40% of the population think that a financial services company would be more likely to do the best job when compared to a retail company .
In a damming indictment of the FS sector, nearly a third of people (28%) stated they ‘Don’t know’, which is effectively a vote against financial service companies.
Only 6% think retail companies would do the best job of looking after their money when compared to a traditional financial services company, which is reflected in the apparent difficulties retailers face in converting a good retailer performance on trust into the financial services market.
For example, when rated on their trustworthiness the major supermarkets’ financial services offerings rank relatively low with the following percentage scores: Tesco Finance (4%), M&S Money (4%) and Sainsbury’s Bank (2%).
However, the fact that over a quarter (26%) of the population think both retailers and financial services companies are no better or no worse at looking after your money suggests that all is not lost for retailers looking to strengthen their position in the FS market.
M&S voted UK’s most trusted retailer for the second year in a row Baber Smith’s Insight Survey reveals that M&S is the Britain’s most trusted retailer with 39% of consumers voting it as one of their top three most trustworthy retailers. John Lewis (26%) and Boots (23%) complete the top three in the trustworthy stakes.
Tesco’s dominance of the supermarket sector (according to the survey, 82% of consumers have used the supermarket in the past 12 months) fails to translate into trust, coming one place and one percent behind Asda (20%) in fifth with 19%.
Since consumers are much more likely to trust retailers they use (as with the FS sector), when you measure trust in relation to usage/market penetration, the new leader is confirmed as John Lewis with a staggering 64% trust rating amongst its customers. M&S drops one place to second with 54%, but Waitrose jumps four places to third with 45%.
What do consumers value? As with financial service companies, when asked to state the top three reasons why retailers are trustworthy, consumers rank ‘Good reputation’ (55%) as the most important.
‘High quality products’ and ‘Good value for money’ (42%) came out as joint-second. ‘Living up to the promises in their advertising’ is marginally more important in the retail sector than the FS sector (16% compared to 11%).
However, ‘Keeping in touch with me regularly’ (2%) is more than six times more important in the FS (15%) than retail sector.
Financial services companies trailing retailers in the trust stakes Significantly, it’s only when you compare the trust levels between the two sectors that you see that consumers trust financial services companies considerably less than retailers.
The top ranked financial services company is of course Nationwide, however it only scores a weak 15% compare to the top placed retailer, M&S with 39%. Indeed, if you were to combine the trustworthy rankings of the retail and financial service companies, it would place Nationwide equal seventh.
Sam Jordan, Managing Director, Baber Smith comments: “What’s striking about the findings of this research is how so few consumers seem to trust financial services companies, even with ones they trust to look after their own money. Since trust is strongly linked with actual usage, the challenge brands face in this sector is how to encourage consumers to change their financial services provider in the first place?
He adds: “Retailers dominate financial services companies when it comes to gaining consumers’ trust, but when it comes to converting a good retail performance on trust into the financial services market, many of the big players seem to struggle. However, with so many consumers apparently unsure of their current financial services provider the opportunity for brands to expand their presence in this sector is huge.” The Insight Survey is based on online surveys of 2,117 consumers.
The research was carried out by YouGov between 11th - 14th June 2010. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). * In each case, when ask to name their most trustworthy retailer and financial services company, the respondent was encouraged to choose up to three companies (out of 20).
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