Quarter of investors switching financial service provider during pandemic, research finds

One in four investors have switched financial services providers due to poor service that they have received during the coronavirus pandemic, according to new research by Market Financial Solutions (MFS).

The bridging lender found that 25% of investors have switched financial service providers in the last 12 months, a number which rises to 55% for those aged between 18 and 35.

MFS commissioned an independent, nationally-representative survey of 975 UK investors, all of whom have investment portfolios valued at £10,000 and above.

When investors were asked why they had switched provider, 40% of respondents said their banks have been taking longer to respond to requests since the beginning of the pandemic. As a consequence, 35% have lost confidence in their bank’s ability to assist with their financial goals – another figure which increased for those between the ages of 18 and 35, to 47%.

One of the key frustrations identified by investors was the standard of customer service provided.  The research found that two-thirds of investors fear COVID-19 has made banks over-reliant on technology when it comes to engaging with their customers. Furthermore, 61% admitted that they prefer face-to-face interactions over digital conversations when communicating with a financial services provider.

Elsewhere, the MFS research suggested that the pandemic has permanently changed what investors now look for in a financial services provider – with 34% believing this was the case.

MFS CEO, Paresh Raja, commented: “Nearly 12 months since the beginning of the first lockdown and financial firms are still struggling to adapt to the conditions brought on by the coronavirus pandemic. Customers are clearly frustrated, with today’s research showing that a significant number of investors are no longer confident in their bank’s ability to support them.

“While the end of COVID-19 could be in sight, the reality is that things will not return to the way they were pre-pandemic. Investors want to work with financial organisations that can deliver a personalised and tailored service, not to mention support and guidance during these uncertain times.

“That’s why all the organisations that make up the financial services sector need to ensure they are recognising and responding to the changing demands of their clients. If not, they run the real risk of losing customers to rival firms.”

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