- People generally have a very limited understanding about how the financial services industry works, including its regulation and regulatory institutions.
- While trust in the financial services sector is low, it has risen in the past decade, including relative to legislators.
- There is little support for deregulation (including amongst Conservative voters in 2019), with a significant appetite for more government action to regulate the financial services sector.
- People want to make sure the economy and their personal finances are protected from financial crises, but many feel disempowered.
- Most people don’t want their money to contribute to harming the planet, but many aren’t aware that their mainstream bank/ financial institution might be enabling this.
This briefing paper explores existing research on public perceptions of the financial services industry and its regulation in the UK. The first section of the paper outlines research directly related to this broad topic. The second section looks at supporting information about public perceptions of finance and the financial services industry as a whole, as well as climate change and social responsibility.
Although there is a lot of research about perceptions and understanding of the financial services industry, finance more generally, and some about the relation between climate change and finance, there appears to be less about the role of government and regulators. It was also challenging to find much information about particular messengers and mediums through which people receive information about financial services. Therefore the research highlighted in this paper is more heavily skewed towards some areas than others. It should also be noted that the time period over which the research has been collected is quite long - going back to the 2000s (specific dates are provided). A brief summary of each section is outlined below.
Note: This briefing paper relies partially on survey data, some of which is stated as being representative of UK or British adults. However, it is important to note that those from Black, Asian, and minority ethnic (BAME) backgrounds tend to be underrepresented or not reported in these types of polls (Wang, Corner and Ogunbode, 2021).
Public perceptions of financial services regulation
Research shows that people think there is a key role for government in the economy and that they should regulate financial services (Devlin, 2014; NEON, NEF, FrameWorks Institute and PIRC, 2018). The public has little confidence that banks comply with regulations and when asked about big businesses generally, a majority thought that they would abuse their staff and customers without government regulation (YouGov-Cambridge, 2013; YouGov, 2014).
People think the highest priority for the government’s new regulatory framework for the finance sector should be “ensuring the financial system is safe and stable to ensure there isn’t another financial crisis” (Finance Innovation Lab, 2022a). Also, a majority of the UK public feel negatively about financial services regulators promoting ‘international competitiveness’ (Finance Innovation Lab, 2022b).
The financial services industry
Public perceptions of the financial crisis 2008 tend to be negative. Ten years after the financial crisis, a majority of people felt that it could happen again and that banks and bankers should have been more severely punished (Positive Money, 2018; YouGov, 2018). Since then, trust in bankers and large financial institutions has remained low, though it has increased slightly in recent years, including in relation to politicians and government ministers (Department for Business, Energy & Industrial Strategy, 2021; Financial Conduct Authority, 2021; Clemence, 2021).
People appear to have a limited level of understanding of the UK financial services industry, view it differently to their personal finances, and there are also barriers to engaging with finance, including people’s level of financial numeracy (Fielding, Arthur, Stanley and Matthews, 2021; Kennedy and Gottfried, 2021; YouGov, 2019).
Climate change and social responsibility
There is public concern about “banks’ financing of fossil fuels”, and people do not want their investments or banks themselves to harm the planet (Department for International Development, 2019; Elliott and Löfgren, 2022). However, there is also a low level of awareness of sustainable investment and how banks use customers’ money (ClientEarth, 2019; Department for International Development, 2019).