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Financial Services Posted 14 Dec 2020

Same storm, different boats

COVID-19, consumer finance and the chance for brands in 2021.

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Each of us has our own narrative to describe the rollercoaster of 2020 – a year that many will want to forget, and yet, never will.

But we look to 2021 with hope. A fresh start, a new leaf, time for us all to begin again.

Throughout 2020, and the backdrop of the COVID-19 pandemic, we – like many who seek out fresh insights to inform thinking, advice and creative ideas – explored how individual and collective experiences of the pandemic could change values, perceptions and mindsets in such a way to induce long-term behavioural changes.

To do this, working in collaboration with Opinium Research, we incorporated psychological models and adopted research techniques crafted from psychological theories to distinguish our findings.

Our objective was to identify the potential trends that could impact the decisions we make, about our working lives, our political views, how we approach environmental sustainability, and importantly how we approach our finances and the financial decisions we make day in, day out. Ultimately helping us define a clearer path for brand communications as we move into 2021.

Financial inequality

In her September article entitled Covid: we’re in the same storm but not the same boat”, Financial Times Editor-at-Large Gillian Tett reflected on how the pandemic had cruelly accelerated already deep-rooted national inequalities, including – of course – that of financial inequality.

Sadly, financial inequality is felt most keenly when it sails into financial vulnerability.

As he describes in the Lansons x Opinium Life Through Covid report on Financial Security, The Mail on Sunday’s personal finance editor Jeff Prestridge concurs. He notes we are:

“a more divided nation than before the pandemic” … “those in employment are more optimistic about their finances than maybe we would expect them to be. Remote working has enabled many households to save on work travelling costs and big-ticket expenses such as holidays. This has enabled them to save and pay down mortgage debt”, while “households that have suffered job losses suffer badly”.

What next for Financial Services brands?

Looking to 2021, the opportunity for Financial Services brands is huge. Reputations are hard-earned, and the legacy of how financial institutions treated their customers during COVID-19 (and beyond) will be entrenched for years, if not decades. Summarising our Life Through COVID research findings, we believe people’s changing financial circumstances and financial priorities translate to five focus areas for financial services providers:

1. Consumers remain cautiously optimistic about their finances

Tone is everything. Financial Services brands can explore more upbeat and positive communication that tunes into current customer optimism. However, stay close to the mood to judge and carefully balance positivity with realism. Insight is critical. Ask, listen and adapt in response to what customers want and need.

2. Financial stability is more favourable than rapid growth for investors

The crisis has galvanised investors to review their portfolios as concerns about the long-term value of their investments become heightened. Providers can help investors by offering insight, support and education to help and reassure them with both their short and long-term goals.

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3. Consumers look to shore up their financial futures

There are anxious and uncertain times ahead for many; the impact of economic recession is deep-rooted and long-standing. Financial Services providers have a responsibility to support staff and colleagues as well as customers during times of hardship.

4. A reputation restored for the banking sector?

The nation’s banks still carry a legacy from the Great Financial Crash and last recession, but there is a unique and unexpected opportunity to turn the tide on the reputational challenges of recent years. Reset the narrative. This is the time to reposition for a new future, based on greater trust and goodwill.

5. Reimaging a ‘good’ return

Purpose matters. Identifying Purpose in a post-COVID world – and identifying how that will impact governance, customer service, treatment of employees and shareholder returns – should be top priority for the Financial Services industry. But it has to be more than words on a wall.

COVID-19 has shifted perceptions of what matters and what people care about. Multiple stakeholders will place greater importance on a company’s behaviours and principles. Purpose must be articulated, then embedded in the fabric of how the organisation is run.

Ultimately, the financial services industry overall can position for the future – in support of, innovating for, and truly partnering with, its customers.

Weathering the storm together in 2021.

View Report Series: Life Through COVID-19

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