Challenger and regional banks are rising in the affections of the British public as consumers lose trust in traditional high street lenders, according to new survey data seen exclusively by City A.M.
None of the five biggest British high street banks make the top 15 out of a trust ranking published today by Brand Finance, a brand valuation consultancy. The ranking was based on the survey responses of more than 1,000 British consumers.
The ranking shows challenger banks generally performing better than the traditional high street giants, whose reputations suffered severely in the aftermath of the financial crisis.
Clydesdale Bank topped the chart on trust by its users, while Royal Bank of Scotland came bottom of the ranking of banks’ reputations.
However, it was not all bad for the RBS Group, as its private banking subsidiary Coutts topped the ranking for trust overall across the users and people who do not bank with it.
Nationwide Building Society was the best performer of the 10 largest lenders in the trust rankings, with almost three-quarters of users saying they trusted it.
Halifax was the second-worst performer overall, although it is also the major bank with the highest proportion of users who claimed they are “very likely” to switch to another.
The reputations of the biggest high street banks have been tainted by the massive government bail-outs and a string of scandals such manipulation of the Libor (London Interbank Offered Rate) benchmark and misselling payment protection insurance (PPI).
Brand Finance noted a relatively high negative correlation, at 0.57, between the level of trust and the self-reported likelihood to switch bank, suggesting addressing reputational damage could help banks to retain customers.