Consumers are planning to borrow larger amounts amid rising inflation, despite a lack of trust between customers and financial institutions.
Over the coming 12 months, one in seven Europeans and one in five in the UK plan to borrow more money to cope with the rising cost of living, according to the latest survey by CRIF, shared at this year’s Open Banking Expo.
CRIF’s research of 7,000 European citizens found 73% of respondents say banks and financial providers should be doing more to help their customers during the current economic crisis.
Speaking at the Expo, Sara Costantini, managing director of CRIF, said: “A common theme though in all these questions is the fact that the interviewees think that something must be done and this something that was expected by lenders, banks, and financial institutions.”
Consumers are hesitant to approach banks for financial help, however. One in five said they are concerned the bank will attempt to sell them products which are unsuitable and the same number said banks do not have their best interest at heart.
Instead of relying on lenders and banks for financial support, consumers are turning to alternative methods to ease financial worries.
“Customers are very conscious and very aware of the sacrifices they need to make,” Costantini added. “76% are ready to cut essential costs and 59% are also very aware of cutting non-essential costs. They are ready to review holidays and take extra hours and extra work.”
To improve relationships between customers and financial institutions, and establish more trust to encourage consumers to seek financial support, banks and lenders must provide tailored products and services to better meet the specific needs of customers, Costantini said.
Banks, in particular, were singled out as needing to proactively reach out to customers to offer money-saving advice on insurance and bills and to do more to enhance their digital services – something seen as a priority for those aged 18 to 34 years old who responded to the CRIF survey.