Context

Access to financial products and services is a broad ranging issue, encompassing practical issues such as digital or geographic access, issues relating to personal circumstances such as barriers to mortgages for older consumers and general issues such as difficulty in understanding complex financial products and technical language.

This report draws attention to the problems that a lack of access to financial services can cause. These cut across demographic boundaries and can negatively affect anyone regardless of their level of income, financial capability or technological ability. The authors suggest that financial inclusion is a pre-requisite for full participation in society.

The study

This is a qualitative study setting out the issues of access to financial services in more depth. The study comprises:

• 50 qualitative depth interviews with consumers, mostly carried out in-home; the consumers were selected to be more likely to suffer from access issues due to a range of conditions, as identified in previous research;
• 28 interviews with ‘expert’ representatives from a range of charities, consumer bodies, industry organisations and firms: the interviews were primarily carried out over the phone, with a few conducted face-to-face; and
• Six focus groups with consumers: those selected had recent experience of access issues.

The consumer sample achieved a balance between male and female respondents, and covered a wide range of ages, income levels, ethnic and religious background, family or marital status, housing tenure and work status. The fieldwork was carried out by ESRO, and conducted across England, Scotland, Wales and Northern Ireland between July and November 2015. The report was commissioned by the Financial Conduct Authority (FCA) to help understand how better to address issues of access and inclusion.

Key findings

The report contains a number of detailed findings under the following headings:

• the research allocated access issues to three categories: ‘The Maze’ – process, requirements and eligibility; ‘The Fog’ – market navigation and comprehension; ‘The Void’ – digital and physical barriers.
• the issues uncovered were broad and affected all types of consumer, not only specific groups.
• these were where consumers failed to find a product that met their needs.
• consumers demonstrated a range of strategies to cope with exclusion and access issues, which regularly involved relying on a third party such as friends and family.
• Consumers who experienced issues felt let down by financial services providers and frustrated that there was ‘nothing for them’ in the market, leading to exclusion.
• There appeared to be a stalemate – stakeholders such as financial services providers, government and consumers themselves seemed to all blame each other. This stand-off allows access issues to continue.
• whilst consumers recognised that there have been improvements, they still hold the financial services industry responsible for problems, and few spontaneously suggested that government or the state could help.

The report concluded by presenting a framework within which to understand which issues were causing which problems. Key areas where access issues arise include: online difficulties, know your customer and anti-money laundering legislation; credit reference agencies and lending decisions; older mortgage borrowers; and insurance products.

Points to consider

• The report focuses on financial inclusion which is a timely and relevant topic.
• One of the key findings was that any consumer can have access issues, regardless of their income, skills or financial capability. The findings are specific to the UK and whilst some of the issues may exist in other markets, many relate to the UK financial services sector and, as such, are not transferrable.
• The report is of interest to anyone with an interest in financial inclusion.
• This was a qualitative study so there was no attempt to quantify to what extent the UK public experience these issues. However, it was a large-scale study, and the researchers took care to include a wide range of consumers and experts, and the findings are detailed and compelling.

Full report

Mind the gap - full report