Last week, the Financial Conduct Authority (FCA) published the latest findings from its Financial Lives research. The survey tracks consumers’ use of financial services.
Here we look at how the UK’s consumers approach financial services, how this can vary by region, and how, as a marketer, you should respond in your marketing and communications strategies.
What is Financial Lives?
The Financial Lives Survey is the regulator’s first large-scale tracking survey of the way consumers behave, and their experiences when they engage with financial services firms and buy financial products.
The plan is to run the survey every two years; the first one took place between December 2016 and April 2017. In that time, the regulator interviewed nearly 13,000 consumers aged 18+ across the UK.
The research was a combination of a bespoke online survey and face-to-face interviews with people in their homes. The in-person interviews ensured that non-internet users were included in the research, and also aimed to increase the number of participants aged 70 and above.
Some key findings from the survey
- Vulnerability increases in rural areas: compared with the UK average of 50%, 55% of adults in the North West and 54% of adults in rural areas show characteristics of potential vulnerability.
- Not everyone is online: 48% of UK adults living in rural areas are 75 or over, have health issues that affect their day-to-day activities a lot, and/or do not use the internet at least most days.
- In rural areas, the take-up of mobile banking by adults with a day-to-day account is nearly half that (23%) of adults in urban areas (45%).
- Greater proportions of adults use consumer credit in urban (77%) than rural (68%) areas.
- When it comes to high-cost loans, Scotland (0.4 million people) and Yorkshire and the Humber (0.3 million people) have above-average concentrations of high-cost loans.
- Only 6% of UK adults have used regulated advice in the last 12 months; this is highest in the South East (8%) than in any other nation or region. Only 39% of UK adults trust financial advisers to act in the best interest of their clients.
Using the findings to inform your marketing
It’s all too easy to assume – when the media is full of millennials and their expectations – that everyone wants to bank online, check their financial situation on their phone, and get professional advice on their finances.
This survey shows otherwise – that while online financial services and innovation in delivery maybe the future, the current state is a very different picture.
And with 94% of UK adults not seeking professional advice in the last year, the messages financial services providers are trying to convey may not be reaching their targets.
What does this mean for financial services marketers?
Firstly, don’t assume that online is everything. As the survey shows, a significant proportion of consumers are not online or do not regularly access financial information via the internet. When communicating with existing customers or devising new financial promotions, bear this in mind.
Secondly, make sure your advice and promotions are appropriate for your audience. Around half of all respondents display signs of potential vulnerability. You need to make sure your financial promotions and other customer communications are suitable.
The need for suitability is particularly important when you consider that only a tiny minority seek out professional advice. (Incidentally, if you do market to, and via, advisers, you’ll want to make sure that your adviser marketing complies with the recent MiFID II regulations.)
Thirdly, take into account any regional variations in approaches and preferences when it comes to financial services. If you are part of the high-cost credit industry, where take-up is far higher in some areas than others, you may want to address this in your communications strategy. You can read the latest on FCA regulation of the consumer credit industry here.
Treating Customers Fairly is a good first step
The research clearly shows that there are variations in the ways UK consumers approach financial services. You’ll want to take these into account when planning your marketing strategies, along with the wider findings around accessing financial information and preferences on ways to receive communications.
If you want to ensure your marketing and consumer communications are in step with the requirements of the UK’s consumers, making sure you meet the FCA’s Treating Customers Fairly (TCF) is a good first step.
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When you face business or regulatory challenges, we can provide solutions that are tailor-made to your needs with a view to releasing your energies to focus on your clients.
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