Mis-sold Investment Specialists - Call For a Free Expert Claims Assessment
0808 163 1659

Back to blog overview

Why Only 36% Trust British Banking

Published on:

It’s safe to say that the various mis-selling scandals of the last decade have shaken British people’s trust in their financial institutions. In fact, the Financial Services Compensation Scheme (FSCS) in conjunction with the Warwick University Business School recently released a report that reveals just how low our trust in our banks has fallen – and why.

Second Least Trusted Industry

The report surveyed 2,591 people and the responses show quite clearly that financial services are the second least trusted industry in the UK, with only the media ranking lower.

Only 36% of British people have trust in their banks and other financial companies, placing the UK in 19th out of the 27 countries included in the survey. Compare that to two of the UK’s financial competitors, the US (51%) and Hong Kong (61%), or unanimous chart-topper India, where a huge 77% of respondents said they trusted their financial services.

This is a worrying situation for the British financial industry, which relies mostly on trust to win customers.

Why Don’t We Trust the Banks?

One question the report seeks to answer is why do we have so little trust in our financial institutions? In order to answer this, it first clarifies exactly what constitutes trustworthiness. According to the report, trust comprises a number of different aspects:

  • Alignment – ‘Is it in my company’s interests to provide the things that I want or need?’
  • Benevolence – ‘Do I believe that my company will do things for me even if it’s not in their interest?’
  • Competence – ‘Is my company able to consistently deliver what I want and what they promise?’

The survey respondents were asked to provide their opinions on 18 issues relating to financial services, all of which fitted into one of the three categories above. The results showed the following:

  • Alignment scores – Moderately high. By and large, respondents believed the bank’s interests are closely aligned with their own. The only time this was not the case was when switching accounts – in this case, most respondents felt interests were not aligned.
  • Benevolence scores – Very low. Most respondents felt financial institutions acted in a self-interested manner, with little altruistic interest for their customers. This strongly suggests that poor reputation is at the heart of the problem.
  • Competence scores – High. Respondents had faith in the ability of financial institutions to deliver results.

Trust Gaps

The results above show that we believe banks have the capability to deliver good results – but we don’t believe they have the motivation to do so. In short, there is a gap between our trust in their intentions – mainly our belief that they act in a self-interested way – and their ability, claims or reputation to offer good services to their customers.

Where are the biggest gaps in trust? The report found that these were the key areas:

  1. Fair pay. The majority of respondents said they believed that senior managers received large bonuses, regardless of performance, whereas branch staff earned only basic salaries.
  2. Product competitiveness. Most respondents didn’t believe that their banks would notify them if another product or service came to market that would benefit them more.
  3. Rewarding loyalty. Banks frequently offer attractive incentives for new customers, but most respondents saw this as a lack of reward for loyalty and felt frustrated that they’re not offered the same appealing rates as newcomers.
  4. Compensation for poor advice. By far the biggest issue in terms of trust was receiving compensation for bad advice. The vast majority of respondents said that their financial institutions would be unwilling to reimburse them if they’d provided poor advice.

Raising Awareness About Financial Protection

The report warns banks and other financial service providers to put greater emphasis on raising the level of trust in their customers. One of the ways to do this, the report urges, is for the banks to commit to improving transparency – by offering the same deals to new and existing customers alike, for example.

The report also urged banks to make people more aware about the protection available to them should they feel that they deserve compensation for poor advice.

Request a call back

If you'd like us to call, please fill in your details

Why choose us?

  • Hassle-free process.
  • No lengthy paperwork to complete.
  • No upfront fees.
  • Your own dedicated claims expert.
  • Over £80 million reclaimed for clients.
  • Award-winning business.
More About Us

Speak to our friendly experts

If you feel you've been let down by your bank or financial adviser please call us.

Call today 0808 163 1659

Customer Stories

We've helped thousands of people win compensation as a result of unsuitable financial advice.

William Thornley I’m absolutely delighted with the service we got from Goodwin Barrett, I couldn’t believe how easy it was and i’ve nothing but praise for them
Alan Parton This was an excellent result which my wife and I never expected. My sincere thanks to you for such an excellent achievement, I cannot thank you enough
Stuart Snowden After sending a report to Santander, they agreed with our findings and awarded Mr Snowden an amount of £7,000 made up from a refund of the losses together with interest and compensation.
William Miller This was a fantastic result I never expected. My sincere thanks for such a prompt and efficient service.
Margaret Long I am so grateful to your company but especially to Steve Wise for getting me the money back
Janet Rynkiewicz We reported our findings to Halifax and within a matter of weeks had secured our client the sum of £26,700 in compensation.
Fred Hardman After we sent a detailed complaint to Halifax, Fred was delighted to receive £6,916 from the bank in a matter of weeks.
Stephen Montague Having investigated the complaint Lloyds TSB agreed that the advice was unsuitable and agreed to pay the clients £10,700.