Financial Services Forum: The behavioural impact of Covid on attitudes to personal finance
SimpleUsability’s Judith Doherty joined Lucy Beldon, Research and Inclusivity Lead at CDS and Panintelligence CEO, Zandra Moore for a panel discussion hosted by the Financial Services Forum recently.
Based on our own internal research, the hour-long session looked at how attitudes and behaviours to personal finance have changed since March 2020, and here are some of our key takeaways.
Using data to drive inclusivity – and highlight exclusion.
Kicking things off, Lucy looked at the importance of utilising data to drive better decisions for your customers. While there may be a wealth of information at your fingertips, the key is to delve deeper and seek out actionable insights which can help you to offer an inclusive experience for all.
According to the Office for National Statistics, 9.9 million workers have been furloughed in the UK, with YouGov finding that 69% of those were worried about their financial situation. Conversely though, the Bank of England believes others are better off – saving money by not commuting, going on holiday, or socialising with friends.
But which is it?
The impending recession makes it more important than ever for organisations to understand and assist their most vulnerable customers.
Looking over the past 12 months, we’ve hurtled towards the idea of a cashless society too. With shopworkers and fellow customers ‘looking down’ on those who want to pay in pounds and pence – and some stores refusing to offer anything other than electronic payments.
While this is, of course, in a bid to reduce the transfer of germs which could live on physical currency, it’s a shift which has – perhaps unintentionally – excluded a massive proportion of society. In fact, over eight million adults in the UK (that’s 17 per cent of the population) rely on cash to make payments every day.
An inclusive approach is one which ensures no one is left behind, and it’s our job to ensure we design services which are accessible to everyone. That process must start with understanding.
Delving deeper into the figures.
Handing over to Judith Doherty, participants saw findings of our own in-house research, which sought to understand how COVID-19 and lockdown have impacted people’s finances, how they pay for goods, and the way they bank.
Of the 2,098 people we spoke to, 45% said they were less secure financially, compared to 17% of whom felt more secure. Interestingly though, during lockdown, 38% of people saved more money, 33% moved money, and 30% used more credit.
In terms of financial advice, 10% had sought help with their assets – with 61% having turned to Moneysavingexpert.com for advice. For those finding guidance, 38% were looking for financial product comparisons, 38% for benefits entitlement information, 31% mortgages and 29% debt advice – all down 4% from the same research carried out six months ago.
Interestingly though, 54% said they were unlikely to use cash, yet 78% of people would be reluctant to have a cashless society. While it’s easy to simply assume this would be the answer of the older generation – consideration must be given to vulnerable people too.
While 66% of people are visiting their bank less often, 51% admitted to having found alterative ways to facilitate the transactions they needed – but 82% had no doubts or concerns about applying for products without visiting a branch.
And, while the shift to a digital-first solution shows little sign of abating, those financial institutions which want to do away with brick-and-mortar sites should exercise caution, as people still value a human-to-human interaction – and cite it as being central to building trust.
The ‘extreme’ safety measures associated with online banking, mobile apps’ tendency to log you out after a relatively short amount of time, and the feeling of being ‘duped’ when you realise you’ve been talking to a ‘bot’, can all be detrimental to the relationship you’re trying to build with the customer.
So, what now?
Financial services organisations must seek to develop trust and look beyond the current trends in order to personalise services. The key to remaining inclusive and accessible is by genuinely understanding customers and respecting their individual channel choices.
Data in practice
Closing the session was Zandra Moore, CEO of Panintelligence – a team of business intelligence specialists born out of FinTech. She explained how analytics can help users to generate greater understanding of business objectives, make decisions based on more than a ‘gut’ feeling, and comprehend the meaning and potential impact of change.
Using the examples of Hawkeye and VAR as having found a place in sport – where judgement calls used to rely on the eye of officials, this solution not only provides a clear answer but allows everyone to be engaged with the decision, showing a visualisation of a potential foul.
Elsewhere, the firm had been presented with a colossal list of banking data and the question: ‘why are so many customers with a high credit score defaulting?’ As the information was unpicked, a 90-person data set emerged – all of whom were women over 50 that had lived at the same address for 10+ years, had a very low credit score of which 10% were defaulting on their payments.
Of that 10% though, 80% had been recently widowed.
This insight allowed the organisation to identify a group of customers who needed to be treated – and communicated to – in a different way. While it may seem like a basic example, understanding your customers is absolutely key to ensuring you take the most suitable – and perhaps empathetic – approach when dealing with what can often be a very tough-to-understand sector.
While the FCA is placing increasing responsibility on organisations to ensure their communications are inclusive, there are so many cases where the stick is more appealing than the carrot. Fearing the wrath of the regulator is often, sadly, more of a driver and the real challenge is selling the idea of inclusivity and understanding to the highest echelons of organisations.
Yet, if we’re going to thrive in the wake of the pandemic, products and services must be based on what customers truly need – communicated and delivered in the way they need it, not the way we want to present it.
If you missed the webinar and would like to watch it again, it’s available on our Vimeo page.