We in Britain love a moan. The glass is always half empty and nothing is ever good enough for the average man on the street. But when it comes to the banking industry, many feel the criticism is justified.
Personally I think that this is an emotional reaction and is often unilaterally and wrongly used to criticise ALL parts of these large institutions, however I digress.
According to the recent announcement from the consumer group Which? high street banks have “lost their
moral compass” and must “fundamentally change” in order to restore the public’s confidence.
And it seems many consumers are now willing to consider alternatives to the traditional banking system according to research from uSwitch. Even though they have limited previous banking experience, consumers say they would entrust their money to brands such
as John Lewis and House of Fraser – and even more youthful brands such as Amazon.
With Sainsbury's, Marks & Spencer, John Lewis and others having embarked on forays into financial services, this might suggest a tipping point is about to be reached, heralding a mass exodus from the banks.
If there is a perception retailers care more about customers than financial institutions or offer better value for money for financial services – and the uSwitch research shows us this – then action needs to be taken.
All providers of financial services need to focus on transparency and trust. The result would be positive for everyone – not just the man on the street, but also the financial services providers themselves who’ll benefit from a closer relationship with their
customers and a better understanding of customer needs. And some more competition in this market is good all round.
In the long run, banks must be trusted in order to maintain a stable and sustainable business. If something doesn’t change, consumer attitudes will become even more entrenched, opening the way for the new challengers to steal a lead.
What cannot happen is that the established providers rely too much on low churn in high-street banking. If they don’t take steps to rebuild their reputations don’t create new and compelling services, and don’t explore partnership opportunities, the future of
the industry will continue to look shaky.