ARLINGTON, Va., May 12, 2011 /PRNewswire/ -- Nearly 50 percent of global consumers believe financial institutions don't care about the customer, according to the Consumer Financial Monitor, a new survey released today by Corporate Executive Board (NYSE: EXBD) (CEB). When asked to rate providers on dimensions critical to trust, respondents, who included 18,500 consumers across 24 countries, gave institutions a vote of no confidence. This is critical to the financial services industry as findings indicated that confidence increases product purchases. Consumers' lack of confidence left as many as 63 million financial products unsold this year.
Across the globe, consumers expressed low confidence in financial providers because they believe institutions lacked shared values, had an inability to provide helpful guidance and advice, and offered overly complex product suites. Fifty-one percent believed institutions didn't share the values of their customers, 46 percent said they lacked confidence that financial institutions kept their commitments and promises, and 52 percent of global consumers felt institutions didn't offer clear or simple policies.
The Global Economics of Consumer Sentiment
While there was little variation in confidence between developed and emerging markets overall, regional disparities surfaced. In Asia, 63 percent of consumers surveyed had positive or neutral feelings about financial providers, which is attributable in part to the fact that large economies experiencing dynamic growth showed the largest percentage of consumers who felt positive about their finances. This is in stark contrast to Latin America, where 55 percent of consumers expressed little or no confidence in financial providers, even though Latin Americans felt positive about their financial situation. European consumers were only slightly more upbeat than those in Latin America with 52 percent expressing confidence in providers. North Americans generally reveal more confidence in financial providers than other regions.
"Many people may think that the wake-up call the global recession delivered would have created better alignment between financial institutions and their customers, but the reality is they are far apart and the poor perception of the industry held by consumers is constraining purchase activities and leaves firms vulnerable to new competitors," said Peter Aykens, managing director at Corporate Executive Board. "There is a tremendous opportunity for these institutions to connect with their customers in meaningful ways, and in doing so, increase confidence and loyalty."
Prosperity and Perceptions
CEB's Consumer Financial Monitor found a strong correlation between satisfaction with financial providers and wealth. In many cases, wealth leads consumers to positive associations about their personal finances and leads to the highest level of satisfaction with financial service providers. Forty-seven percent of consumers with more than $100,000 in investable assets had positive feelings about their personal finances and 20 percent of that same group had "a lot" or "complete" confidence in their financial institutions—that rose just slightly to 49 percent and 22 percent respectively for individuals able to invest more than $1 million in assets.
Consumers with less than $100,000 in assets to invest felt substantially worse, with 40 percent saying they had negative feelings about their personal finances and 48 percent saying they had little-to-no confidence in their financial provider.
Life Stage Sways Sentiment
Consumers ages 47-64 felt more negative about their personal finances and their financial providers than any other age group, despite the fact that they have the most financial services products. This is troubling given the financial needs they face with retirement on the horizon.
Young adults ages 18-29 were more positive than their older counterparts with 49 percent saying they were either generally neutral about or confident in their financial providers. Younger adults also indicated more satisfaction with financial products, but only 28 percent indicated they proactively manage their finances.
Repairing the Relationship
Based on the Consumer Financial Monitor finding and more than 25 years providing proven best practices to financial services organizations, CEB suggests that institutions wanting to capitalize on products—and revenue—left on the table in 2010 begin working to rebuild trust with consumers by:
- Becoming a money coach: Put a personal budgeting tool in consumers' hands that will automatically plug in transaction and balance information. Consumers who proactively manage their money buy more products and are more satisfied. Additionally, consumers who feel on track financially consolidate their savings with their primary provider.
- Being courageous: Be transparent about pricing and tout the value of products. A whole generation of consumers has been mistakenly led to believe that certain financial products are low-value commodities and should be free. Institutions need to remind customers of the value and convenience of core products and provide a rationale for the fees associated with them.
- Listening to customers: Equip staff with simplified sales processes that incorporate the lost art of listening to customer concerns and needs.
To learn more about Corporate Executive Board's Consumer Financial Monitor please visit www.executiveboard.com/financial-services/index.html. Media wishing to speak with Corporate Executive Board regarding these and other findings from the report, should contact Wunmi Bamiduro at email@example.com or (571) 303-4573.
CEB's Consumer Financial Monitor will on a quarterly basis, track the trends in sentiment and behavior of 18,500 financial consumers across 24 countries. Sentiment metrics include: personal feelings about finances, satisfaction with products, and confidence in providers. Behaviors tracked include: financial management, shifts in savings and debt, and product purchase. Together, this will help the marketplace measure, understand, and forecast demand for financial services across geographies and segments.
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SOURCE Corporate Executive Board