The Fairer Finance Trust in Banking Index - 2024

Every six months, Fairer Finance polls 10,000 banking customers via the pollster Opinium to ask them how much they trust their provider.

Using our polling data - which goes back to 2015 - we have created our Trust in Banking Index. This index tracks how far the public trusts their banking providers and measures how attitudes have changed over time.

The latest data, from polling completed in February 2024, shows:

• Overall trust levels are stable since Autumn 2023

• Savings providers have improved their levels of trust since 2022, likely because of higher interest rates

• Trust in mortgage, loan and credit card providers remains relatively lower than for savings and current accounts. This suggests that lenders are currently less trusted, a result that makes sense in the context of high interest rates

Which groups are more or less trusting?

The chart below shows the breakdown of responses for different demographic groups when asked how far they trust their current account provider (I’ve focused on current account because this is the most commonly-used banking product).

These results show:

• There is no significant difference between male and female levels of trust

• Younger customers (18-30) have slightly above-average levels of trust

• Those who don’t rate their confidence managing money highly are less trusting of their bank

One implication of this data is that banks should make an effort to build trust with those who are less confident with money. This could be done by communicating with these customers more pro-actively and taking steps to ensure all these communications are worded in plain English and contain explanations of all financial terms.

We also looked at levels of trust by household income. Trust tends to higher among those with high household incomes (especially over £110,000).

This trend could be due to a few factors.

• First, those with higher incomes may be using premium or premier bank accounts that have more perks than standard current accounts

• Second, those who have higher incomes may be more positive about their bank because they are more positive about their personal finances in general

• Third, those with high incomes may be using their overdrafts less and so incurring fewer fees from their bank

Which banks are most trusted?

Our polling shows a wide variation in how trusted different current account providers are.

Comparing the trust scores of different banks over time, a few trends are visible:

• Building societies and ‘challenger’ banks (such as First Direct, Monzo and Starling) are more trusted than high street banks

• NatWest’s trust score took a hit in 2023, possibly due to the Nigel Farage debanking scandal. It has not yet recovered

To understand what lies behind these trends, we need to explore what characteristics highly-trusted banks have.

What are the sources of customer trust in banks?

When it comes it current accounts, good things tend to go together.

Banks that are more trusted also have happier customers (and vice-versa).

There’s also a strong correlation (0.9) between trust and satisfaction with a provider’s digital services (such as the app, website and customer portal).

Interestingly, there’s also a correlation between trust and how well customers think their bank communicates with them, as shown in the figure below.

Customers that trust their bank might instinctively be more positive about their communications, since they trust that their provider won’t mislead them. On the other hand, it’s also possible that having clear and informative communications builds trust with customers, because they believe that their bank is making an effort to help them make good decisions and not conceal important information from them.

We also asked respondents why they were happy with their current account provider. These were the results:

These show that, on average, customers most value:

1. A reliable service

2. Good digital services

3. Good customer service

4. Their money being secure

5. Having good access to branches

However, if you look at what customers like about different providers, it becomes clear that different providers have different strengths. Monzo and Starling, for example, have customers who are most positive about their app/website and (absensce of) foreign use fees, while Nationwide’s customers are more positive about branch access. First Direct’s customers, meanwhile, are most positive about the customer service.

This suggests that there isn’t one way to being a highly-trusted bank. Different providers have carved out different niches for themselves (a point I noted last year).

Why are younger customers more trusting?

As mentioned above, younger customers (18-30) have above-average levels of trust in their current account provider. Understanding the preferences of this cohort is vital for banks, since a lot of people stick with the bank they chose in their youth for many years.

One reason that younger customers display higher levels of trust is that relatively more of them use highly-trused providers like Monzo and Starling, and relatively fewer use high street banks that score less well.

However, many 18-30 year olds still use high street banks as their main current account (that their salary is paid into). The shares for Monzo (c. 4%) and Starling (c. 2%) are still relatively small for this cohort, likely because lots of people have a primary current account with an established high-street bank and use a challenger bank as a secondary account.

Another reason that younger people are more trusting could be that they have dimmer memories of past banking crises, such as the 2008 financial crisis and the LIBOR scandal.

It’s also possible that this group is seeing their preferences fulfilled better by banks than older age groups. The chart below shows that younger customers place relatively more value on banks’ apps and websites, budgeting tools and rewards as sources of customer satisfaction. They place relatively less emphasis on customer service and branch access (the last point is important, since branch access has been declining for most banks in recent years).

Lessons for the banking industry

A few general lessons can be drawn from this data:

• The most trusted banks have highly-rated digital services. Providers should prioritise their websites and apps and not see these as ‘nice to have’ features.

• The most trusted banks are highly rated for communication. This means that taking care to communicate with customers at the right time, through the right channels, and in a clear and understandable way is key - all the more so in light of the Financial Conduct Authority’s Consumer Duty.

• Reliability builds trust. Unlike in insurance, where customers rarely interact with their provider, current accounts are a product that most of us use on a regular basis. This means that having good customer service, and a website and app that doesn’t break down, means relatively more for customer trust in banking. If customers don’t encounter issues with the service, they won’t have a reason to distrust their provider.

You can access the full data behind the Trust in Banking index on the Fairer Finance Insight Portal. For information on this, or if you’re interested in learning more about the work that Fairer Finance does with providers, contact corporate@fairerfinance.com

Note: The last edition of the Trust in Banking index used unewighted totals for the sector-level trust figures. This has been changed to weighted totals, to bring it into line with how brand-level data is reported.