The battle for consumer trust

Despite the lack of trust in high street banks, retailers looking to take market share from the big players and provide financial services for consumers will have to work just as hard to gain their confidence.

Mindi Chahal

Research has revealed that 89 per cent of consumers don’t trust retailers any more than banks to handle their finances.

According to the study, carried out by Rostrum Research, 51 per cent of respondents say they do not trust retailers any more than traditional financial services providers, while 38 per cent indicated that they trust banks and retailers to the same degree.

As with most purchase decisions in tough times, price becomes the deciding factor between the retailers. When respondents were asked what would persuade them to choose a particular retailer over another retailer for financial products, 40 per cent say that price was the most important factor, an existing relationship with that retailer coming in a close second at 29 per cent.

Mark Houlding, chief executive officer at Rostrum Research, explains that supermarkets and high street giants have “a wealth of experience when it comes to understanding their customers and encouraging consumer loyalty.”

However, the research shows that the perceived difference between selling consumer goods and financial products is significant but the potential for this market represents a big opportunity for retailers.

Respondents were asked which retailer they would be most comfortable buying financial products from, Tesco came out top, followed by John Lewis and M&S – which has just launched M&S Bank.

This is backed up by a report from August this year by Uswitch.com which showed that consumers would rather have a current account with John Lewis than the banking giants. Both Tesco and M&S have run targeted campaigns on their financial offering, which also explains these results.

Call me old fashioned or naïve but despite the faults of high street banks I’d rather put my money in the hands of financial institutions than companies who sell consumer goods. I’m with the 89 per cent.

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