While the concept of personalisation remains popular, new research reveals that young people’s trust in how banks and other financial institutions use their personal data is low, highlighting a major challenge for the financial industry to overcome.
New customer experience (CX) research from Press Ganey Forsta, a data analytics and insights provider, finds that only 59 per cent of 18 to 24-year-olds trust financial services providers with their personal data – the lowest of any age group surveyed. At the other end of the spectrum, 81 per cent of over-65s continue to trust financial services providers with their data.
The new data points to a growing generational divide in the financial services sector, despite the fact that younger generations are pushing hardest for faster, smarter and more tailored services. In fact, 75 per cent of younger customers would switch providers for improved personalisation if the benefits were clearly communicated.
Yet while banks lead the trust race, willingness to share data is highly conditional. Half of all consumers say they would stop sharing their data if personalisation feels intrusive or underdelivers. This highlights a fundamental challenge for banks: how to build loyalty with consumers who crave personalisation but approach data sharing with caution.
“We’re seeing a paradox in customer experience, while appetite for personalised services is high, trust in how that service is delivered is not,” explained Kyle Ferguson, CEO of Press Ganey Forsta’s cross-industry division. “Financial services remain one of the most trusted industries, but that trust doesn’t always extend to how personal data is handled. The disconnect between high expectations and low trust for younger generations highlights the need for greater transparency and a more human-centred approach to customer experience.”
Closing physical touchpoints and embracing AI
With older customers remaining the most trusting of financial services out of all age groups, in-person support is a key driver of this trust, with 36 per cent of over-65s ranking access to a local branch and the ability to speak to someone directly as their most valued service.
But that legacy of trust is at risk as in-person touchpoints disappear. One in five UK consumers visited a financial branch in the past month, yet 43 per cent of over-65s say they struggle to find a branch near them. This reflects a nationwide trend: according to Which?, over 6,300 UK bank and building society branches have closed since 2015, amounting to 64 per cent of the network.
Meanwhile, the role of automation and AI is expanding rapidly in financial services, from chatbots and virtual assistants to AI-generated insurance assessments and financial recommendations. But trust in these technologies is not guaranteed. Eighty per cent of all consumers want to be informed when AI is used in financial recommendations, and 40 per cent say their trust would be damaged if it is used without disclosure.
Trust in AI also varies sharply by age. While 44 per cent of all consumers say they are comfortable with AI-led financial recommendations, this rises to 69 per cent among 25 to 34-year-olds, but drops significantly among older customers, as 72 per cent of over-65s say they are not comfortable with AI being used for this purpose.
Ferguson concludes, “Financial services providers are at a crossroads and a fundamental challenge: meeting the expectations of two very different audiences without compromising trust. Forward-thinking companies are putting the human experience at the centre of their strategy, using customer insight to design services that are clear, inclusive and based on what people actually want.”
