Consumer loyalty and trust are key for the future of financial services

At a time of record mis-selling fines the Financial Services Consumer Panel is calling on financial services firms to behave more like those in other retail sectors.

Speaking at the City UK Edinburgh conference on Thursday 28 November, Consumer Panel Vice Chair Kay Blair urged financial services providers to take lessons from other retailers and focus more on encouraging customer loyalty.

Kay Blair, Consumer Panel Vice Chair commented:
“In most other retail sectors customers are rewarded for their loyalty. Yet, financial services firms continue to compete fiercely for new business at the expense of their most loyal customers. Such customers often find, for instance, when they come to renew insurance policies that their premiums have risen yet their cover appears to have reduced. Similarly, savers find they are penalised when introductory deals come to an end and they are dumped unceremoniously into extremely poor accounts.

The financial services industry needs to follow the Government’s lead on the Bank of England and look outside for fresh ideas. The rest of the retail world prioritises customer loyalty and satisfaction for good reasons.

A healthy and trusted financial services industry is critical to financial wellbeing. Firms can play a key role in developing better money habits, particularly around critical aspects such as retirement planning.

In financial services we need to see better, simpler products; fair and transparent charging; an advice regime that is free of bias and can truly act in customers’ best interests; and effective redress when things go wrong.

Notes to editors

1. Biographical details of Kay Blair and photographs in a range of resolutions can be found: http://www.fs-cp.org.uk/about_us/kay_blair.shtml[1]
2. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
3. The Panel’s membership is drawn from a broad range of backgrounds with expertise including market research, law, financial services industry, financial inclusion, European Regulation, financial regulation, consumer advice, campaigning, communications, compliance and later-life issues.
4. The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available on our website[2].
5. Panel members are appointed to serve a maximum of two terms of three years.