Media Release

PRESS RELEASE: British public want better business behaviour from financial services companies

British consumers want better business behaviours in financial services and would be willing to switch provider to get it, according to exclusive polling in a new report from think tank the Social Market Foundation (SMF).

Good Culture: Does the model matter in Financial Services? explores consumer views of company behaviour by financial services firms and how this affects who they choose to do business with.

New polling for the report, conducted by Populus, show that nearly two thirds of consumers (64%) would switch providers if their current financial services company was involved in bad business behaviours, while four out of ten (41%) would be willing to switch specifically to find a provider who behaved in a more ethical way. It also reveals that the public believe nearly two thirds (60%) of financial services companies continue to take big risks after the financial crisis, while 72% of firms are seen as putting shareholders and profits before customers, and 69% are viewed as put pressure on staff to sell certain products or behave in ways which are not in the customer’s best interest.

The SMF’s findings show that six in ten consumers (60%) believe that ownership structures can make a difference to the way financial companies act. Customer owned mutuals (79% of consumers likely to trust) top the polls of the financial services business types consumers are likely to trust. While consumers believe that customer owned businesses are most likely to engage in good business behaviours, the dominant shareholder owned PLCs are seen as the least likely to create strong corporate cultures.

However the SMF found that, despite their stated preferences for certain business ownership types, the average member of the public can only successfully recognise the ownership model of two of the UK’s 15 largest financial services companies.

To help create clarity for customers, greater competition and better culture across the financial services sector, the report recommends:

  • Establishing a ‘Good Culture Kitemark’ to be awarded to financial service products provided by firms that exhibit good corporate behaviour. The Kitemark would allow consumers to understand at a glance how financial service providers perform against a broad set of standards above and beyond the requirements of regulation which financial services providers could sign up to.
  • Level the playing field for different business models to increase diversity in ownership. Making life easier for non-PLC models in the UK would help to boost diversity in the financial services sector, improving both the industry’s resilience and that of the economy as a whole. Providing an explicit remit to support diversity as well as competition in regulators’ mandates.
  • Reducing the deposit guarantee limit to £30 000. At present, consumers’ motivation to switch financial services providers on the basis of behaviour is dulled by substantial deposit guarantees. A lower deposit guarantee limit would continue to cover more than the average household’s annual income, a 10% deposit on the average cost of a house and the median gross financial wealth of UK households, but would provide a signal that consumers can be affected by the behaviour of financial services firms and should take this into account when choosing providers.
  • Financial mutuals should be provided with access to appropriate capital instruments. Survey evidence suggests that the implementation of a Good Culture Kitemark scheme would encourage consumers to seek out mutual providers of financial services. At present, however, these firms are limited in their ability to expand by access to capital. A range of suitable instruments should be made available so financial mutual of all sizes can access capital markets, while maintaining their mutual character.

Commenting on the findings, SMF economist and report author, Katie Evans said:

It is clear that there is a significant lack of trust in much of the financial sector. Consumers don’t believe all financial services firms are involved in negative practices, but they struggle to identify companies who they think are more likely to meet their expectations.

“Consumers need better information about business behaviour in financial services firms to help them identify firms with good corporate cultures. We believe that a Good Culture Kitemark scheme could play an important role in helping financial services firms find a business case for better behaviour.”

In response the report, Mark Austen, LV= Chairman said:

“Our belief is that mutual ownership is supportive of a virtuous circle and much of our success is down to our model as it enables a culture ensuring we always act in the interests of our customers. Our fundamental values exist to support our customers and members, employees, and the communities in which we operate. Our view is if we look after our people, our people will look after our customers and as a consequence we increase long term value for our members.”


  • This report is sponsored by LV=. The SMF retains absolute editorial control over its outputs.
  • The SMF is a leading independent UK think tank which develops innovative ideas across a broad range of economic and social policy, champions policy ideas which marry markets with social justice and takes a pro-market rather than free-market approach



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