The Financial Conduct Authority (FCA) has found 7.4 million people unsuccessfully attempted to contact one or more of their financial services providers in the 12 months before May 2022, with the most vulnerable in society most likely to struggle with this.
The figure comes from the FCA’s latest Financial Lives survey with over 19,000 respondents.
Less than half of UK adults, or 21.9 million people, had confidence in the UK financial services industry and just 36% agreed that most financial firms are honest and transparent in the way they treat them. Although a more positive picture emerged when people were asked to rate their own provider rather than the sector in general.
The regulator’s findings come only days away from the introduction of the Consumer Duty. The Duty will require firms to act to deliver good outcomes for consumers and, in turn, help to improve trust and confidence in the financial services sector.
Under the Duty, firms will have to:
- Provide helpful and responsive customer service – for example, it should be as easy to complain about or switch and cancel products or services as it was to buy them.
- Equip their customers to make good decisions through communications people can understand, provided at the right time.
- Provide products and services that meet consumers’ needs and work as expected.
- Explain and justify their pricing decisions. This includes being able to demonstrate that rates offer fair value.
Sheldon Mills, Executive Director, Consumers and Competition said: “Times like this show why it’s important people get the support they need as more people are likely turning to their financial services providers for help.
“Our Consumer Duty will guide our ongoing work to improve the way firms provide customer support – getting through to your provider is the starting point for receiving help, so we will be working with them to improve in this area.”
FCA action since the start of the cost-of-living squeeze has already led to an increase in the amount of engagement lenders are having with their customers. Following conversations with firms and new guidance set by the FCA, lenders supported over 2 million mortgage customers to manage their finances in the past year, including through budgeting tools, access to debt advice, and tailored mortgage forbearance.
While there have been positive steps taken, there is still work to do – 4.9 million people who used firm communications to help them make a decision in the 12 months before May 2022 found it did not help at all.
The FCA’s survey also found that an increasing number of people are choosing to use digital banking, payments and other online services, with almost nine in ten adults (88% or 42.9 million) banking online or using a mobile app in 2022, up from 77% in 2017.
While there is an increasing number of people regularly using digital services, the FCA recognises that many people are still heavy users of cash (6% or 3.1 million) and reliant on face-to-face services. Through the Financial Services and Markets Act, the FCA will take on powers on access to cash and will expect firms to ensure that they meet all their customers’ needs.