How the ‘fintech effect’ is driving the retail banking sector to boost financial well-being
Our new Ratings Report finds a real step change taking place in the retiail banking sector.
Since the financial crisis, we have seen a constant flood of “doom and gloom” headlines about UK banking and the need for the sector to focus on its most important capital stock – its customers. Our new Ratings Report finds a real step change taking place in the banking sector, which is showing signs of putting the financial well-being of customers more and more at the heart of its products.
Through a comprehensive review process, rating 76 financial products on how well they promote financial well-being of customers, we have found that fintech innovators have driven up standards in customer control and experience since our last Ratings Report was published in 2013. In fact, the industry may have reached a tipping point in this regard, with large banks now also beginning to follow suit: over the last three years, we have recorded an increase of 57% in our ratings of current and savings accounts; products which now include more features that put customers in control of their money, such as the 45% of analysed current accounts which can tag expenditure according to different categories such as eating out, petrol or groceries.
Despite the many improvements, progress amongst credit card issuers has slowed in the last three years, due in part to the fact that many providers are not embracing the technology available as readily as the rest of the industry.
There is still a lot of work to be done in the sector. It is time for all providers to join the party and to use the current momentum to change products for the good of customers. For almost a decade, we at the Fairbanking Foundation have been working with financial institutions to create products that prioritise financial well-being and many products have already received a Fairbanking Mark, which certifies that they are designed to actively help the financial control of customers. It is an opportunity for financial institutions to further build the much-needed trust with their most important capital sock – their customers.
The Ratings Report 2017 was published on the 15th of February and can be found here: http://fairbanking.org.uk/ratingsreport2017/. It analyses 76 products in 8 product categories: current accounts (with and without overdraft), savings accounts, credit cards and personal loans, while mortgages, children’s savings and student current accounts are evaluated for the very first time.