Retail banks not winning the consumer confidence war

Rostrum Research, the independent market research consultancy, has today published a new study revealing that only 11% of British consumers trust retailers more than High Street banks to handle their financial affairs. According to the research study, 51% of respondents said that they do not trust retailers any more than traditional financial services providers, while 38% indicated that they trust banks and retailers to the same degree.

When respondents were asked what would persuade them to choose a particular retailer over another retailer for financial products, the majority of them (40%) said that price was the most important factor, with an existing relationship with that retailer coming in a close second (29%).

The results are part of a new study “Retail vs Financial Services: The Battle for Consumer Trust”, that aims to provide insight into the potential inroads retailers could make into the traditional markets of financial services. In the coming weeks, Rostrum Research will be releasing more findings of the survey into consumer preferences and views in this area.

Mark Houlding, CEO of Rostrum Research, said,

“New entrants are looking to shake up the UK financial services market. Supermarkets and new types of financial services providers are attempting to take market share from the established players – but our research suggests that winning the hearts and minds of consumers will not be easy or straightforward. That said, by combining well-known brands with an established store network – a handful of these retailers, such as Tesco (33%), M&S (21%) and John Lewis (20%), are making progress in encouraging customers to trust their financial services offerings, particularly the all-important current account product. However, it remains to be seen whether these new players are able to really take a large share of the market.”

“Supermarkets and high street giants have a wealth of experience when it comes to understanding their customers and encouraging consumer loyalty. However, our research shows that the perceived difference between selling consumer goods and financial products is significant and there is a long road ahead for retailers. Despite these challenges, the potential for this market represents a big opportunity for retailers who get it right.”