New YouGov research shows how COVID-19 has significantly impacted consumers’ financial behaviours and priorities and will likely continue into 2021.
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Almost two fifths of Britons say they’ve actively reduced their non-essential expenses (37%), and six in ten plan to carry on limiting their expenditure (61%).
Some have also seen negative financial impacts such as being forced to dip into savings (18%) or borrow money (7%). Yet despite this, a quarter have managed to save more money throughout the pandemic (24%). This presents both challenges and opportunities for financial institutions as consumers provide fewer transactions but have more potential customers for savings products.
Looking at the year ahead, Britons are focusing on fulfilling their regular financial commitments such as paying bills and rent (49%), with over a third saving money for unexpected hardships (35%). Just 12% will prioritise saving for their retirement.
YouGov’s ‘On the money: Global banking & finance report 2021’ provides a high-level analysis of consumers’ attitudes to financial services across 17 global markets. The white paper is based on more than 18,000 interviews and explores payments, investment, ethics in banking and marketing as well as touching on how the COVID-19 crisis has affected financial services worldwide.
On the money: Global banking & finance report 2021
The coronavirus pandemic has led some to stop using cash for fear of transmission of the virus and hastening the introduction of a cashless society. YouGov’s research shows that a preference for cash varies greatly throughout the world; over half of Mexican’s say they prefer to use cash (52%) as do 46% of Germans. In Great Britain, a fifth prefer to use cash (22%).
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The Nordic countries in our study are notable exceptions. Just a fifth (20%) of Swedish consumers expressed a preference for cash, while in Denmark this falls to 13%.
Contactless payments are similarly varied in popularity; 77% of Poles use contactless payment wherever possible compared to 43% of Americans and Germans. 7 in 10 Brits use contactless often (71%).
When it comes to their money, consumers in our survey have a low appetite for risk. British consumers show the greatest aversion to risk of this group (70%), while consumers from Singapore and Germany demonstrate the greatest propensity for it (31% each). While Brits are the most risk averse, they are the least likely to have been a victim of a fraud or scam (59%) than others.
Most Brits believe that a lack of awareness (58%) or being gullible (56%) are the main reasons people are victims of fraud or scams.
From data breaches and large executive bonuses to tax avoidance and diversity issues, the ethical side of banking is a key consideration for the global public. Nearly half of consumers think banks should prioritise fair pay for staff (47%), followed by protecting customer data and data privacy (40%). Ensuring a hygienic and safe environment for staff and customers comes third, something that is likely to only increase in importance in a post-COVID world (32%).
When asked to choose between financial companies paying fair tax and paying staff a fair pay, Brits were almost evenly split but with a preference for paying staff fairly (54% verses 48% for fair tax), indicating the human side of the industry is more important to British consumers.
Additionally, a quarter of Brits believe meeting sustainability goals should be a priority for senior managers in financial organisations (24%), with support highest among 18- to 34-year-olds (42%).
Commenting on the research, Matt Palframan, Director of Financial Services Research at YouGov said:
“YouGov’s new finance and banking whitepaper is a critical and timely look at how consumers are feeling in the midst of a global pandemic and focuses on how COVID-19 is likely to impact personal finances going forward. The paper broadly reveals a wave of financial conservatism as consumers react to global uncertainty, many perhaps experiencing a reduction in their outgoings over the past year, leading to a focus on building up their emergency savings. Of course, it varies country to country but in the UK alone we can see that as many people have managed to save more money as have borrowed or dipped into savings combined.
“We can also see from the results how the pandemic is working as an accelerating force for certain trends, such as digital channel uptake and declining usage of cash but also as a key point of reflection where consumers are re-evaluating the role of financial services companies in society. Not only do consumers expect them to do more when it comes to their staff and their customers, but they also want them to act as better role models in terms of wider societal challenges such as climate change and sustainability.
“Ultimately the paper shows how the global financial services industry is experiencing significant transformation and understanding consumers’ financial attitudes, preferences and habits will enable financial services companies to keep up with the pace of change and adapt to consumers’ changing expectations.”
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