Customers lose faith in banks after PPI mis selling and Libor rigging scandals

Nearly half of consumers do not trust banks to act in their best interests, according to a survey by advisory firm, CEB.

The survey, which polled 18,000 global customers, found confidence in financial providers was at its lowest in the UK following the mis sold payment protection insurance and Libor rigging scandals.

47 per cent of consumer said they “did not feel confident that banks could keep their money safe” while only one in ten believed banks kept their commitments and promises.

Chief Executive of Which?, Peter Vicary Smith, addressing the Parliamentary Commission on Banking Standards, described the industry as having “lost all credibility”.

“We absolutely need better regulation – regulation focused not on ticking boxes but on better outcomes for consumers,” he comments.

“Better professional ethics and standards are really important. It’s got to be enshrined in legislation. This cannot be done by the industry. The industry has lost all credibility.

“We let the industry try and sort a lot of this stuff out and there was a banking crisis. We’ve had PPI, we’ve had Libor rigging since then. The industry has no credibility out there to sort itself out. This has to be independent.”

In a separate survey, Which? found that less than four out of ten consumers think banks offer good customer service.

Last week, The Co-operative Bank took steps to change this perception by bonusing staff on service and not sale.