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The Comfort Consumer Trend in Financial Services: Trust and Safety Product Image

The Comfort Consumer Trend in Financial Services: Trust and Safety

  • Published: December 2010
  • 83 Pages
  • Datamonitor

Consumers in the FS industry look for protection and reassurance from their providers in order to feel a sense of safety. The loss of trust as a result of the global downturn has left consumers feeling uncertain. Trust needs to be rebuilt, not only to offer consumers financial safety but also to increase consumer engagement and build better relationships with customers

Scope
- Strengthen customer relationships by driving an increase in consumer engagement
- Demonstrate customer knowledge via an understanding of how the Comfort trend can be used to rebuild trust on a regional level
- Satisfy consumer demands through understanding consumers' need for protection and reassurance
- Restore trust by learning how to demonstrate real concern for consumers and the safety of their finances

Scope
- The highest demand for Comfort is seen in Brazil and South Africa where 78% of consumers demand this Megatrend. The demand for this trend is low in most of Europe where consumers badly affected by the downturn no longer trust their FS providers to protect them
- Consumers who demand Comfort like to build up a nest egg for the future, creating a buffer to protect them READ MORE >

Executive Summary
The FS landscape has changed post-downturn
A holistic view of consumers must be adopted
Tracking consumer trends is fundamental to long-term success
The Megatrends have different levels of importance across the globe
The desire for Comfort is driven by the consumers' need for protection
Comfort is about building trust and protecting the customer
A desire for Comfort is aligned with a need for trust
The decline in trust in the FS sector must be reversed
Consumers are looking to FS providers to safeguard their money
Providers can rebuild trust by engaging and protecting consumers
OVERVIEW
Catalyst
Summary
Methodology
INTRODUCTION: THE IMPORTANCE OF TREND TRACKING TO FINANCIAL SERVICES
The post-recessionary FS market presents new challenges for the industry
A microscope has been placed over the activities of the FS community
Competition is fierce within the industry
Consumer empowerment means that providers must work harder then ever to attract and retain customers
Competing on price alone does not necessarily result in profitability
Datamonitor is committed to creating a holistic view of 'the consumer'
Tracking consumer Megatrends is fundamental to long-term success
Megatrends can be classified in two ways, according to desirable product/service benefits or societal complexities
Megatrends can be broken down into trends and sub-trends to provide structure and clarity at a time of ‘information overload’
Adopting a broader, global perspective to trend tracking facilitates better decision-making by overcoming myopia
Trends have greater long-term implications than fads
For every trend there is a ‘counter-trend’, while ‘trend-crossover’ is also an important phenomenon
Trends are aligned with pre-existing but evolving human values, attitudes, needs, and behaviors
The Megatrends have different levels of importance for consumers across the globe
Comfort is one of the strongest Megatrends globally
The desire for Comfort is driven by the consumer's need for protection
The global financial downturn has left consumers feeling insecure
Comfort will be an influential Megatrend until confidence is restored in the FS sector
THE FUTURE DECODED
The Comfort Megatrend is about building trust and protecting the consumer
Comfort is comprised of key trends
A desire for Comfort is aligned with a need for trust
Demand for Comfort is seen in regions where consumers still trust banks to protect them
Messages of Comfort are needed as consumers age
Comfort is demanded by all income bands
Targeting Comfort will increase revenue across a number of products
Trustworthiness is a crucial attribute for all providers
Insight: the decline in trust in the FS sector must be reversed
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Trust in the FS sector trails levels seen in retail
Trust may simply not be as important in the FS sector
Consumer engagement is vital
There must be a distinction between trust in the FS industry and trust in individual players
Insight: consumers are looking to FS providers to safeguard their money
Consumers need to feel looked after by their provider
Providers must look after the personal details of their customers
Consumers must feel their personal needs are considered
Green and ethical polices offer Comfort
ACTION POINTS
Providers can rebuild trust by engaging and protecting consumers
Lessons can be learnt from other sectors about rebuilding trust
Current account providers must ensure customers feel secure operating their account
Offer flexibility in current account products
Engage consumers through the local community
Ensure that consumers feel protected
Savings providers must show that consumers' money is safe
Show how consumers' money will be protected
Offer a range of savings accounts
Messages of Comfort will encourage saving behavior
Credit card providers should engage consumers to increase trust
Help consumers to feel protected
Offer reassurance with card add-ons
Trust can be gained through engagement
Mortgage providers must show they consider the needs of consumers
Design products to cater to a variety of needs
Trust in advisors and brokers must be rebuilt
Protection and cocooning messages will attract consumers
Personal Loan providers should offer flexibility
Building trust with the consumer
Target consumers with messages of Comfort
General insurance providers must focus on the message of protection
Protection is central to general insurance
Consumers must trust their provider to help them when they make a claim
Life insurance providers should highlight the importance of protecting family and belongings
Life insurance products need to reassure consumers
Providers need to rebuild trust in advice
Pension providers should demonstrate how they can offer reassurance over retirement
Help consumers to protect their future
Messages of Comfort will attract consumers
APPENDIX
Additional Data
Definitions
The Datamonitor Financial Services Consumer Insight Megatrend Framework
Methodology
Income Bands
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer

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