Financial Services Compensation Scheme (FSCS) research has revealed that 63% of respondents believe that awareness of the UK lifeboat scheme and the protection it provides helps to boost consumer confidence in the industry.
More than half (55%) agreed that the scheme contributes to financial stability.
The FSCS said that the research was undertaken to support the discussion on the role of a trusted compensation scheme in the UK financial services industry.
According to the research, 63% of consumers surveyed said that they are more likely to save, invest or spend more of their money where a firm is FSCS protected. More than half (59%) said they are more likely to recommend FSCS-protected products and providers.
However, the survey also found that just 25% of consumers trust the financial services industry to act in the best interests of its customers.
Challenging financial realities
Caroline Rainbird, chief executive at FSCS, said: “Today’consumers are dealing with challenging financial realities. Rising costs and a squeeze on real incomes mean many are facing financial uncertainty well into their future. Innovations in technology across the sector are creating opportunities for growth, but also greater complexity for consumers.
“In addition, recent unrest in the global banking sector is likely to have tested consumer trust and confidence in the industry, highlighting the importance of a trusted deposit protection scheme that is fit for purpose for both eligible individuals and small businesses.
“Against this backdrop it has never been more important for the public to have trust in the financial-services industry and confidence that their money is safe.
“To effectively tackle the economic challenges and embrace the opportunities ahead, all stakeholders must work together to improve trust and confidence in the industry.”
