The University of Southampton
University of Southampton Institutional Repository

Product innovation and consumer choice in the UK financial services industry

Product innovation and consumer choice in the UK financial services industry
Product innovation and consumer choice in the UK financial services industry
Purpose
– Within the UK, low levels of saving has been a continuing policy concern for both government and financial regulators. Why individuals save less than might be expected has been increasingly associated with an inability of ma… financial services consumers to comprehend product quality and to underta… of firms in this debated through examining the product choices presented to consumers by financial services providers.

Design/methodology/approach
– We examine two aspects of poor consumer decision making, yet to be fully explored in the wider regulatory literature. Initially, we review how financial services providers consider product innovations and the marketing strategies they pursue in constructing their offerings to consumers. Secondly, we ass… a popular financial product, the interest bearing deposit account, to examine what savings product choices are actually presented to consumers. These areas are explored through semi?structured interviews undertaken with semi financial services managers and through a review of the entire product offerings to the interest bearing deposit market.

Findings
– We report that savings markets are characterised by high product turnover and short duration. Consumers in the UK, alike many developed nations, and often unfamiliar with, and lack confidence when, buying savings products. Example consumers often have difficulties when making product comparis… Faced by so much proliferation of undifferentiated products, consumers find difficult to make a straightforward comparison between products.

Research limitations/implications
– It is concluded that further public education, a greater understanding of ho… firms present product choices to consumers and how consumers perceive s… choices are areas demanding further research and consideration.

Originality/value
– Consideration of how firms make decisions with regard to product innovation and savings problem more generally is an area demanding further investigation from a range of disciplinary approaches. Finally, given the perceived high importance of financial services to individuals and the nation… economy at large, some scrutiny should be placed on the issue of the high profitability of the financial services industry and how this is reflected into product innovations and, therefore, differentiated quality choices presented various categories of consumers.
financial services, united kingdom, savings
1358-1988
285-303
Costanzo, Laura A.
bce28c22-8b70-4176-b523-4e2f59169baf
Ashton, John K.
ff81bccb-14c5-479e-9456-1de612dd1bed
Costanzo, Laura A.
bce28c22-8b70-4176-b523-4e2f59169baf
Ashton, John K.
ff81bccb-14c5-479e-9456-1de612dd1bed

Costanzo, Laura A. and Ashton, John K. (2006) Product innovation and consumer choice in the UK financial services industry. Journal of Financial Regulation and Compliance, 14 (3), 285-303. (doi:10.1108/13581980610685658).

Record type: Article

Abstract

Purpose
– Within the UK, low levels of saving has been a continuing policy concern for both government and financial regulators. Why individuals save less than might be expected has been increasingly associated with an inability of ma… financial services consumers to comprehend product quality and to underta… of firms in this debated through examining the product choices presented to consumers by financial services providers.

Design/methodology/approach
– We examine two aspects of poor consumer decision making, yet to be fully explored in the wider regulatory literature. Initially, we review how financial services providers consider product innovations and the marketing strategies they pursue in constructing their offerings to consumers. Secondly, we ass… a popular financial product, the interest bearing deposit account, to examine what savings product choices are actually presented to consumers. These areas are explored through semi?structured interviews undertaken with semi financial services managers and through a review of the entire product offerings to the interest bearing deposit market.

Findings
– We report that savings markets are characterised by high product turnover and short duration. Consumers in the UK, alike many developed nations, and often unfamiliar with, and lack confidence when, buying savings products. Example consumers often have difficulties when making product comparis… Faced by so much proliferation of undifferentiated products, consumers find difficult to make a straightforward comparison between products.

Research limitations/implications
– It is concluded that further public education, a greater understanding of ho… firms present product choices to consumers and how consumers perceive s… choices are areas demanding further research and consideration.

Originality/value
– Consideration of how firms make decisions with regard to product innovation and savings problem more generally is an area demanding further investigation from a range of disciplinary approaches. Finally, given the perceived high importance of financial services to individuals and the nation… economy at large, some scrutiny should be placed on the issue of the high profitability of the financial services industry and how this is reflected into product innovations and, therefore, differentiated quality choices presented various categories of consumers.

This record has no associated files available for download.

More information

Published date: 2006
Additional Information: Award: The Emerald Literati Network Awards for Excellence 2007
Keywords: financial services, united kingdom, savings
Organisations: Southampton Business School

Identifiers

Local EPrints ID: 378108
URI: http://eprints.soton.ac.uk/id/eprint/378108
ISSN: 1358-1988
PURE UUID: a6fcbd3f-bda3-47d9-9319-f7496b9351ff
ORCID for Laura A. Costanzo: ORCID iD orcid.org/0000-0002-7197-6778

Catalogue record

Date deposited: 16 Jun 2015 15:36
Last modified: 15 Mar 2024 03:48

Export record

Altmetrics

Contributors

Author: John K. Ashton

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×