When was the last time any researcher ran a study about brand which didn’t include ‘trust’ as a metric? The answer is likely to be “never” in all industries, but in the financial sector and its myriad of constituent parts, the need to gain and measure trust is as acute as its exclusion is unthinkable.
PPI being mis-sold, Martin Lewis highlighting hidden charges and overpriced packaged accounts and heads of the banking world enjoying huge bonuses have fuelled consumer’s distrust of financial providers and made them feel disenfranchised. And this is not only limited to the UK – in Harris’s 2013 US Reputation Quotient no financial services company was rated ‘excellent’ or ‘very good’. However, six of the financial sector’s main players included in the exercise were rated as ‘poor’ or ‘very poor’.
A 12% increase in complaints to the Financial Services Ombudsman in 2012 is a good indication of consumer’s current negative take on the sector. Some may point to the fact that the largest growth in complaints was for PPI (over 200% increase) but that would mask the fact that there is a general need to improve. In the insurance sector alone over 2 in 3 complaints were non-PPI related.
Insurance is not the only sector which sees complaints but as a microcosm of one factor which needs attention it is hard to beat – that is the need to be clearer and more transparent. It is human nature that confusion leads to misunderstanding and this can lead to complaints. In turn this should concern providers as standard reactions to the sector’s communications have, for too long now, been ‘too much jargon’ and ‘I receive so much that I can’t read it all – it needs to be more concise’. Whenever I present in a situation where it feels like a provider is on the right track, I always feel sorry for the person who has created the piece. They come closer than most to the concision and snappy content readers crave, only to be handed a mountain of text and told ‘this needs to go in as well’.
A recent project about a particular type of insurance highlighted the need to go the extra mile to address a lack of understanding caused by bamboozling paperwork and a lack, or a torrent, of information. As long ago as April 2011, lawgazette.co.uk reported that ‘43% of people knew little or nothing about the product, but around 60% of people have paid for the cover’ and over a year and a half later, things have not moved on. People just don’t know about some products, even if they are parting with their hard earned pounds to buy it! Perhaps more damaging for the provider, a portion of the group who need to make a claim will inevitably receive a nasty awakening when their assumption that the policy covers them for ‘everything’ is dashed.
Dissemination of information is also something we often hear. Brokers’ consistent call for something which they can tweak, and adapt for each client, has changed from a murmur to a roar recently.
The call for information flowing from financial service providers to be more understandable is as loud as (maybe even louder than) it has ever been so this is hardly a new challenge for the financial sector. It is, however, one which consumers appear to feel has yet to be met! The real danger for the sector is that consumer trust has eroded at the same time as a perceived lack of progress on clarity and transparency. Exacerbating this is the current belt tightening time in which we live. Thinking logically, if outgoings are being reviewed, are consumers likely or willing to wade through a challenging forest of jargon and tautology to make an informed decision about keeping a policy which is not mandatory? The alternative may be to say ‘never used this and don’t know what it is’ followed by a direct debit cancellation.
It may be time for providers to rethink because the cold fact is that consumers won’t trust something they don’t understand. Whoever devises something which marries the simplicity of clear and engaging messages with the twisted tendrils of compliance could surely retire soon after – but just in case, I hope they understood their pension enough to keep their policy!