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Buy now, worry later: who are consumers turning to in times of need?

BrandVue’s Most Loved Financial Services Brands 2022

Lydia Daniel Consultant 01/11/2022

BrandVue’s Most Loved Financial Services Brands 2022

With prices surging on energy, food and other essentials, the cost of living is at an all-time high.

Together with rising interest rates, the pound in decline and the policy response set to stunt pay growth even further, the future is looking uncertain for individuals and businesses across the UK.

Savanta’s recent Consumer Confidence data reveals that only 14% of consumers are ‘insulated’ from the current economic environment, with 18% reporting cutting down all expenditure and 31% actively buying cheaper brands.

At such a concerning time for many, how do consumers feel towards financial services providers?

Brands in the high street banking space remain high on our Top 100 League Table, with Barclays in 11th place and Lloyds following at 12th. Their response to the crisis comes in the form of practical advice and tools, most notably the ‘Rising Cost of Living Support Hub’ from HSBC, Barclays’ ‘Money Worries Hub’ and NatWest’s cost of living hotline, all offering advice on how to cope with financial pressures. They appear to be following the neo-banks’ lead, whose budgeting tools have been praised for some time, reflected in Monzo climbing four places since 2021, securing a place in the Top 10.

However, banks by their very nature, are not designed to help those worse off in society, who will inevitably be the hardest hit by soaring bills. Risk aversion and the stricter lending criteria that stems from this may lead to future declines in Brand Love amongst this group. While the Consumer Duty is not yet in force, financial services brands should be meeting struggling customers with a willingness to ‘do the right thing’ to combat this.

Consumers are also turning to ‘buy now pay later’ platforms to help spread costs. Consideration for Klarna is up by 5% compared to the same period last year. Brand Love has increased by almost 2 points which has seen the brand making its way into the Top 10 for the first time. This is especially high amongst Gen Z, with more than 1 in 5 (21%) stating that they love the brand.

Of those Gen Z’s who report on being ‘largely unaffected by the current economic situation, 18% state that they love Klarna.

Compared with Gen Z consumers who claim to be ‘spending more cautiously’, we see a 4-point difference, with 22% stating they love the brand.

In an economy where individuals, particularly younger consumers, feel the odds are stacked against them, it is critical for financial providers to show they are on the side of the consumer. This is an area where Klarna succeeds – with over half of those who love the brand (56%) stating it’s “for people like me”.

However, financing trivial goods such as clothes should not come without warning of potential harm, and could be in danger of being seen as providing a temporary fix to the ongoing squeeze.

It is no doubt a challenging time for financial services providers and consumers alike. Brands stepping up in support over the next year will likely be rewarded with a place in the hearts of consumers, in the form of Brand Love and loyalty.

Download the full report for the Top 100 league table as well as more of the latest trends and insights.

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