- Banks second most likely place Europeans would turn to for support with finances after family, new research from CRIF finds
- One in seven now expect to borrow more from their bank this year to handle the increasing cost of living
- While Europeans recognise that sharing their data can help them access better, more personalised financial services, trust remains an issue, with over half worried about how banks use their financial information
- Tailored products, help with saving on bills, and better digital services are among the most sought after improvements people want from their banks
13 October 2022: Millions of people across Europe want to see more action from banks and other financial providers in supporting their customers through the cost of living crisis, new research published today has found.
As the majority of individuals plan to cut back on both essential and non-essential spending, banks remain one of the first places people across Europe say they’ll turn to for financial support (28%), second only to their family (34%). The difficult economic situation is being widely felt across Europe and one in seven Europeans (15%) now say they plan to borrow more in the next 12 months to help them handle the increasing cost of living.
Despite having a critical role in supporting many Europeans, the report, Banking on Banks, finds that three quarters (73%) of European consumers still think banks and other financial providers must do more to help their customers during difficult economic times.
The report has been published by CRIF, a leading provider of consumer and business credit information and digital solutions. It surveyed thousands of individuals across six European markets to better understand their attitudes towards financial services during a period of rising inflation and higher prices across the continent.
When asked what banks and financial providers should be doing to support their customers:
- 40% said banks should be tailoring products and services to better meet the needs of individual customers
- 37% want to see banks proactively reach out to customers if they can help them save money on services like insurance or bills
- 25% want to see their bank improve their digital services
- 33% want to have more support from their bank on how to build up their savings
With recent innovations in financial services, including open banking technology, financial providers can better utilise customer data to build a more accurate picture of their creditworthiness, enabling better lending decisions with reduced risk. This allows providers to go further in providing the services consumers are calling for including more accurate, personalised decisions in areas like lending; the ability to signpost people to more appropriate, potentially lower-cost, third-party services like utility providers; and offer advanced warning to customers of potential issues with their future finances.
However, trust in financial service among European consumers remains a key issue and is acting as a barrier to enhancing services and improving reputations. One in five (19%) worry that banks will attempt to sell them products which aren’t right for them, and a similar number (18%) feel they don’t have their best interests at heart.
When it comes to their data, over half (56%) of Europeans worry about how this information is used by banks and other providers. This is despite an acknowledgement from consumers of the benefits data sharing can bring, with nearly four in ten (37%) saying they’d be prepared to share more of their data if it improved their ability to borrow or access higher credit limits. Half (50%) said they’d be willing to share more information if it meant banks could warn them in advance of potential financial issues.
Leonardo Piva, Business Development Director of CRIF Digital, said:
“Consumers across Europe are wrestling with the increasing cost of living, with millions already cutting back their spending on both essential and non-essential items.
“People want to see providers do more to help during this time by offering more tailored products and services that meet their specific situation and needs, as well as proactively getting in touch to alert them to potential financial issues on the horizon and if there are ways they could be saving money on bills.
“Innovations in open banking and digital services hold the key to not only unlocking better services for consumers, but also enhancing trust and financial inclusion. By communicating the benefits that securely sharing financial information can bring, we can help more consumers across Europe access more accurate, lower risk financial support to help them weather these difficult times.”
The report also highlights other areas where there is a need for improved services, including digital onboarding and signing-up to new services, as well as clearer information over their creditworthiness:
- Four in ten (43%) Europeans say they have dropped out of the application process for a new financial product, citing the process being too complicated or the digital application not being user-friendly as reasons why
- When signing up for new products 18% of consumers want quick decision making, reflecting modern expectations in a digital-first world
- Half (49%) of people who were turned down for lending said they received no information on how to improve their creditworthiness
To download the full report, visit: https://www.crif.digital/whitepapers/banking-on-banks/