Business Economy

68% UK consumers seek financial advice from trusted informal sources over high street banks, says research

London [UK]: The long-term financial health of UK consumers is looking unstable with nearly two-thirds rejecting high street banks for financial guidance and instead turning closer to home, according to a new research by RPG Enterprises subsidiary Foolproof.
“This worrying trend potentially puts Britons at risk of future personal finance chaos. It signals an urgent call for banks to become credible knowledge-sharing sources regardless of the platform,” said the research report.
Foolproof is a subsidiary of global technology company Zensar. It is one of the biggest product and service design company in Europe.
Despite 44 million UK consumers using mobile banking to manage their finances, the research identified that 62 per cent prefer not to turn to high street banks via a store, telephone or mobile banking apps as an educational resource for their finances.
Instead, UK consumers are turning elsewhere including friends and family (20 per cent) and financial
experts turned personalities (19 per cent).
About 56 per cent respondents used mobile banking to check balances, 27 per cent for saving more money and 13 per cent for being in overdrafts less often, said the research.
The shift to online banking has left hundreds of high street branches in the UK closing their doors. In February, the Financial Conduct Authority urged banks to rethink plans to shut more branches during lockdown as more closures could have significant consequences for customers.
“Digitalisation in banking is a positive attribute for consumers and offers so much potential for banks to enhance their service,” said Zensar head Chai Rajebahadur.
“Yet what we see traditional banks typically do when creating complex services digitally, is lose the personal connection — something we as humans all desire — as well as failing to position themselves as authoritative educators,” he said.
Like most industries, the pandemic has accelerated digital alternatives to in-person services within the financial space.
Foolproof Managing Partner George Ioannou said the business model must be rewired at scale to become an educational, trusted resource for those all-important milestone financial achievements such as saving for a new home.
“If banks fail to do this, they could lose out on huge revenue opportunities,” he said.

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