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Just a fifth of Brits trust traditional banks

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Written by: Rebecca Goodman
22/04/2022
Trust is vital for customers when it comes to financial products but just 21% say they completely trust traditional banks, a report reveals.

Traditional Banks are still the most trusted form of financial products, however, with around half of Brits (47%) saying they ‘somewhat’ trust them, while 21% said they completely trusted them. Just 3% said they completely distrust them.

Turning to digital banks, the YouGov report revealed 6% of Brits completely trusted them, while 26% said they ‘somewhat’ trust them. There’s a greater level of complete distrust in these online or app-only challenger banks – at 9%.

Overall, the net trust score showed cryptocurrencies came in at 6%, Buy Now, Pay Later (BNPL, 24%), digital wallets (46%) and sustainable investments (26%).

While cryptocurrencies have the lowest levels of trust, confidence in them is highest among those aged 18 to 24 and lowest in those aged 55 or over.

Many people are still wary of using digital finance, with 82% saying they have some concerns over it, according to the YouGov data, which was compiled from 20,000 respondents around the globe.

The biggest reason for concern came down to a risk of financial accounts being hacked and of identities being stolen, according to 43% of those asked. While 42% said they were worried about only being able to access financial accounts via the internet.

Part of the problem with trust in banks comes down to what has happened over the last few decades.

The report said: “The financial services sector still has an image challenge since the 2008 global financial crisis and building and maintaining trust is an essential priority for the industry.

“For banks and financial services companies to attract and keep their customers, they need to develop and maintain high levels of trust in the products and services they offer.”

Cash is still first choice in many countries

When looking at how people spend their money, despite the changes brought by the coronavirus pandemic, in most countries cash has not been overtaken by contactless payments.

The exception to this was in Great Britain, which has the highest level of contactless payments recorded (79%). In Denmark, Sweden, and Canada, contactless payments were also higher than cash payments.

In 14 of the 18 countries surveyed, cash payments are the dominant method of payment. In France, Poland, Australia and Hong Kong, cash and contactless card payments are almost at equal levels.

Globally, 59% of payments were made in cash, followed by 52% with contactless card payments in a shop and 42% using digital wallets for online payments. The use of emerging payments like BNPL remained low, with just 15% making a purchase this way.

Consumers using BNPL more likely to have debt

The report looked at the use of BNPL, which is currently unregulated in the UK. Globally 15% of consumers had made a purchase this way, with the number falling to 13% for the UK. The highest level of spending with this payment method was in Indonesia at 27%.

More than half of those who had used BNPL (53%) said they were impulsive and they are also more likely to have higher levels of personal debt and to agree that personal debt is normal.

The report noted: “In the wake of the pandemic, whilst price-awareness among consumers has heightened, inflation is setting curbs on spending.

“This has created favourable circumstances for the adoption of BNPL solutions that allow consumers to pay for products and services in interest-free instalments instead of one-time payments.”

Low levels of spending on sustainable investments

Financial products related to sustainability and the environment were low overall. On average 8% had made a sustainable investment, such as a green bond or a fund that doesn’t cause environmental harm, and that fell to 3% for Brits.

Younger people were more interested in helping the planet with their investments, and those aged between 18 and 24,  and 25 – 34 had the highest levels of sustainable investments.

This age group were also more likely to trade stocks online with 14% of those aged 18 to 24 recently trading online compared to 10% of those aged over 55.

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