Public Attitude Towards the Banking Sector After the Financial Crisis - Essay Example

? Market/Social Research Background The onset of the financial crisis in the Britain was signaled in 2007 when the country’s fifth largest mortgage provider, Northern Rock, sought support from the Bank of England. Imperatively, the United Kingdom population was among the first people to be exposed the problems of financial institutions. The problems of Northern Rock persisted despite the injection of liquidity by the government. Eventually, the government announced plans to nationalize the bank as a measure of last resort. The financial turmoil in the financial sector escalated further in 2008 forcing the government to unveil over thirty seven billion bailout plan for the banking sector (Bennet and Kotasz 2012). The financial crisis impacted negatively on the savings of the British public as most banks lost the savings entrusted to them by depositors. According to Buckley, one of the major contributors to the global financial crisis was the untenable rise in subprime mortgage lending (2011). Part of the reason for the rise in subprime mortgage lending is attributable to the government’s own efforts to win votes and popularity by making it easy for the public to buy homes. Also, the banks rode on this high risk debt products due to their potential to generate immense profits. The banks leveraged the mortgage loans with credit default swaps and the mass failure of borrowers to pay back led to added levels of debt on the banks’ books of account. Ultimately, the culmination of mass defaults led to the financial crisis. Due to globalization, the financial crisis had a negative impact on many countries since the world economies are interconnected. The credit crunch had cross cutting effects that affected virtually all sectors of the economy. This led to social economic changes that had direct impact on the British public (Akinbami 2011). This paper will evaluate the British public attitudes towards the banking sector after the financial crisis. Also, the study will investigate the current consumer trends in the banking sector and establish the future trends into the next twenty years. It is imperative to note that public attitudes towards the banking sector as they determine their likelihood to deposit their money in the banks (Navaretti 2010). The onus is upon the financial regulatory agencies to establish the public attitudes and implement strategies to ensure that the financial sector is positively perceived by the public (Hodson & Deborah 2009). The needs of bank customers are evolving rapidly and it is therefore necessary for banks to put in place futuristic plans that can effectively cater for the evolving needs of their customers. Objectives 1. To investigate the public’s attitude towards the banking sector after the financial crisis. 2. To establish the public perceptions on who is to blame for the financial crisis 3. To identify the information that the public receives in regards to the banking industry in the United Kingdom and how this information affects their attitudes towards the banks 4. To establish the consumer trends in the banking sector and the evolving needs of the bank customers 5. To identify the banking products that the customers will need in twenty years time. Limitations The domain of the study comprises of all the public and it is difficult to access all the domains of the public. Suffice to say, the research will be restricted to a sample of the public selected through convenience sampling. It is also notable that numerous changes have occurred in the banking sector after the financial crisis and new factors may contribute to the public attitudes towards the banking sector. Research Design It is important that the opinion and attitudes of the members of the public should be correctly observed and recorded. This research will adopt a pragmatic philosophy in order to effectively collect information about the perceptions and attitudes of the public. It is important to that the nature of the research problem demands for multiple views to appropriately answer the various questions. This research philosophy also accommodates a mixed methods approach that is necessary for this study. As such, the researcher will have to understand this by comparing the qualitative responses from the respondents and comparing them with the statistical results obtained. The research incorporates both qualitative and quantitative research methods. According to Quinlan (2011), qualitative methods are most suitable in cases where the research questions are stated. In this regard, quantitative methods cannot be used as the information collected cannot be statistically manipulated. For instance, the evaluation of the public attitudes towards the banking sector requires a qualitative research methodology. This is because the question seeks to collect on meaning and experience from the participants. Imperatively, most of the research objectives require qualitative data. In as much as qualitative methods seem most appropriate for this research; it is imperative to note that quantitative methods will be used to collect some elements of data. Quantitative methods will add the component of inter-subjectivity which qualitative methods lack (Quinlan 2011). Therefore the use of both methods will help to ensure that valuable and meaningful data is collected to answer the research problem. Sampling Methodology The data, in this case, would be from the entire population of the United Kingdom. According to Zikmund (2010), collecting of data from an entire population is known as a census and it is usually applicable when comprehensive data is required. However, due to time and resource constraints this study cannot be able to incorporate the entire public. It is therefore necessary for sampling to be used in order to select a representative portion of the population for the study. According to Zikmund et al (2010) sampling can be done using either probability or non-probability methods. In the probability sampling technique, all the members of the population have an equal statistical chance of being selected. However, participants are selected based on the researchers’ judgment in the non-probability sampling technique (Quinlan 2011). This research will utilize non probability sampling through the selection of a convenience sample. It is notable that convenience samples are beneficial in that they help the researcher to save on costs and time that would be required to access the entire population. Imperatively, a well selected convenience sample can help the researcher to work swiftly and with an affordable budget. The convenience sample to be selected must be representative of the United Kingdom public in order to sufficiently meet the objectives of the study. In this regard, the convenience sample will include employed people, unemployed people, retired people and students in higher institutions of learning. Students are a significant portion of the public since they have access to information and therefore can make informed contributions on the subject matter. The convenience sample for the students will be selected from a local university that is easily accessible. Employed people form a substantial portion of the public as they contribute the most to the economy. As such, they are mostly affected by economic issues directly. Hence, their opinions on the banking sector will be of significant value to the study. The unemployed are also important for the study since the banking sector affects them either directly or indirectly. It is important to note that part of the unemployed people may have been rendered jobless partly as result of the financial crisis hence their attitudes may be very personal. Retired people are also essential for this study as their participation will add to the scope of the study. For instance, retired people may have witnessed various challenges in the banking sector and hence at a good position to offer contributions in an historical perspective. Data collection methodology Data collection is a critical component of conducting a study as it forms the basis fro analyzing the research problem and coming up with conclusions as well recommendations. In this research, questionnaires will be used to collect data from the selected sample. Dennis (2012) notes that questionnaires can be formulated as: semi-structured, structured or unstructured. The choice of questionnaire formats depends on the research method that is selected. Cognizant that this research utilizes the mixed methods approach, the questionnaire will be semi-structured. It is imperative to note that the qualitative and quantitative methods require structurally different types of data and this can be effectively handled by using semi-structured questionnaires. Suffice to say, the data from collected from the participants through this method can be analyzed statistically as well as by using descriptive methods. The questionnaires will be the main primary data collection tools. The validity and reliability of the questionnaires will be ascertained before they are used in the filed. The reliability and validity of the questionnaires will help to ensure that the data collected is accurate and has integrity. The questionnaires will be distributed to the selected sample of participants by the researcher. Draft Questionnaire Please answer the following questions Part A: General Information 1. Please fill in your name 2. What is your age bracket ?18-25 Years ? 25-35 Years ?35-55 Years ? Above 55 Years 3. How long have you lived in the United Kingdom? ? Less than one year ? Five years ?More than five years 4. Do you have a bank account? ? Yes ? No Part B: Attitudes towards banking sector 5. How informed are you on the banking trends in the United Kingdom ? Not informed ? Fairly informed ?Well informed 6. According to your understanding of the banking industry, how would you rate its performance ? Poor ?Average ? Good 7. How much confidence do you have in the UK banking sector ? No confidence ? Average confidence ? Full confidence 8. How much are you informed about the 2007/2008 global financial crisis ? Not informed ? Fairly informed ? Well informed 9. From what sources did you get information regarding the financial crisis ? Government publications ? Media outlets ? Other people 10. How much do you trust banking sector after the financial crisis ? No trust ? Average trust ? Full trust 11. Did the global financial crisis change your attitude towards the banking sector? ? Not sure ? No changes ? Changed attitudes 12. To what extent were you affected by the global financial crisis ? Not affected ? Moderately affected ? Fully affected 13. Do you believe that the UK Banking industry was responsible for the financial crisis? ? Yes ? No ? Don’t know 14. Who do you blame for the global financial crisis? ? Banking sector ? The government ? Don’t know 15. How do you rate the reaction of the banking sector towards the financial crisis? ?Poor ? Average ? Good Part C: Future trends in the banking industry 16. Please state the banking products that you currently use. 17. What is your level of satisfaction with the current banking products that use? ? Not satisfied ? Fairly satisfied ? Fully Satisfied 18. How frequently do you use internet banking? ? Never use internet banking ? Occasionally ? Always use internet banking 19. Does internet banking offer you benefits ? No ? Not sure ? Yes 20. How frequently do you access the internet ? Never ? Occasionally ? Always 21. What reasons inhibit your use of internet banking? 22. What improvements would you suggest in regards to internet banking? 23. What kind of mobile phone do you own? ? None ? Feature phone ? Smart Phone 24. Do you use other applications on your phone? ?Yes ?No ? Not sure 25. Would you use your mobile banking? ?Yes ? No ?Not Sure 26. Would you link your mobile phone with your bank account? ?Yes ?No ? Not sure 27. What banking operations would you want to do on your phone? Part D: Demographics 28. What is employment status ? Unemployed ? Employed ? Retired 29. Where do you live in the United Kingdom? 30. Do you have any bank savings? ? Yes ? No ? Not sure Interviews will also be used in the data collection exercise. Interviews are very effective in the gathering of both verbal and non verbal data. Creswell (2007) indicates that interviews can be helpful in enabling the researcher to ask follow-up questions in order to elicit more information from the respondents. It is imperative to note that this may be beneficial especially in situations where the researcher is intent on evaluating the emotional aspects of the participants. This research aims at ascertaining the public attitudes towards the banking sector as well as establishing the future trends in customer needs. Therefore, the use of interviews will come in handy to interrogate the participants in order to establish the underlying reasons for their attitudes and future choices. Data Analysis The study seeks to evaluate the public attitudes towards the banking sector in the United Kingdom and to establish the trends in consumer needs for the next twenty years. Therefore, the data analysis will be structured in a manner that will effectively address the research objectives and establish meaningful findings. The data analysis will seek to establish the underlying factors that influence the public perception of the banking industry and also methodologically infer the future trends in terms of customers needs for the next twenty years. In order to evaluate the first objective of investigating the public attitude towards the banking sector, the data collected will be analyzed graphically to ascertain the most prevalent attitudes from the public. The frequency of all the stated attitudes will be graphically represented in order to indicate the most common attitudes. It is also imperative to note that the interviews may produce expressions for attitudes which may not be necessarily recorded in written or verbal form. Such expressions will be factored in by the researcher so as to obtain a comprehensive analysis of the attitudes from the public. Further, the excerpts from interviews will be analyzed so as to obtain the pertinent information that the participant said during the interviews. It is vital to note that descriptive analysis will be incorporated in the data analysis. This will help the researcher to incorporate the qualitative aspects of the research and gather the details that may be relevant in giving recommendations. The quantitative information in regards to trends of customer needs in the banking sector will be analyzed using statistical tools such as SPSS. For instance, the data on customer preferences and adoption of various banking products will be plotted into comparative tables to establish the underlying trends. The data analysis will also incorporate the use of standard statistical tools such as measures of confidence to confirm the validity and reliability of the data collected. This is a critical aspect of data analysis as it ensures that the data collected is viable and capable of being used to make recommendations and conclusions on the subject matter. The client will receive analyzed data in form of tables, graphs and pie charts. The data will be presented as stipulated in the study’s objectives. For instance, the client will receive a pie chart indicating the frequency of various public attitudes towards the banking sector in the United Kingdom. The trends of customer needs in the banking sector will be represented using scattered line graphs. Tabulated data will also be presented to the clients to indicate the pertinent issues of the study such as to whom the does the public lay blame for the banking crisis. The results from the qualitative research methods will be presented in a summarized form indicating the main findings from the field study. For instance, the information collected from interviews will be condensed and written down in summary form. Important issues from the interviews will be presented to the clients in form of excerpts from the specific sections. It is important to note that all the data analysis will be presented in a manner that is consistent with the research objectives as specified by the clients. The data analysis will seek to answer the main research questions of ascertaining the public attitudes and the future trends in the banking sector for the next twenty years. Bibliography Adapa, S 2011, ‘Global E-Banking Trends: Evolution, Challenges and Opportunities’, E-Banking and Emerging Multidisciplinary Processes: Social, Economical and Organizational Models (2011): 1-16. Akinbami, F 2011, ‘Financial service and consumer protection after the crisis’, International Journal of Bank Marketing, Vol. 29 No. 2, pp 134-13. Bennet, R. and Kottasz, R 2012, ‘Public attitudes towards the UK banking industry following the global financial crisis’, International Journal of Bank Marketing. 30 (2), 128-147. Buckley, A 2011, Financial Crisis: Causes, Context and Consequences. Essex: FT Prentice Hall. Chau, V, and Liqing W 2010, ‘The youth market for internet banking services: perceptions, attitude and behaviour’, Journal of Services Marketing 24.1 (2010): 42-60. Chava, S and Amiyatosh, P 2011, ‘The effect of banking crisis on bank-dependent borrowers’, Journal of Financial Economics 99.1 (2011): 116-135. Creswell, J 2007, Research Design: Qualitative, Quantatative and Mixed Methods Approach. 2nd ed. London: Sage Publications Ltd Hodson, D and Deborah, M 2009, ‘UK Economic Policy and the Global Financial Crisis: Paradigm Lost?’, JCMS: Journal of Common Market Studies 47.5 (2009): 1041-1061. King, B 2010, Bank 2.0: How customer behavior and technology will change the future of financial service, Marshall Cavendish Corporation Koenig, L, Nicole, A, and Alexander, M 2010, ‘Predicting young consumers' take up of mobile banking services’, International Journal of Bank Marketing 28.5 (2010): 410-432. Navaretti, G, et al. 2010, ‘Multinational banking in Europe–financial stability and regulatory implications: lessons from the financial crisis’, Economic Policy 25.64 (2010): 703-753. Nolle, D 2009, ‘Consumer Complaints About Banking Practices 2001-2008: What Were They Thinking?’, Available at SSRN 1987060 (2009). Popov, A and Gregory F 2012, ‘Cross-border banking, credit access, and the financial crisis’, Journal of International Economics 87.1 (2012): 147-161. Quinlan, C 2011, Business Research Methods. Hampshire: Cengage Learning. Reinhart, C, and Kenneth, S 2009,The aftermath of financial crises. No. w14656. National Bureau of Economic Research, 2009. Saunders, M., Lewis, P., Thornhill, A. 2007, Research Methods for business students. Esssex: Pearson Education Ltd. Schmidt, A 2009, ‘Putting the political back into political economy by bringing the state back in yet again’, World Politics 61.3 (2009): 516-546. Skowron, L, and Kai, K 2012, ‘The impact of the recent banking crisis on customer loyalty in the banking sector: Developing versus developed countries’, The TQM Journal 24.6 (2012): 480-497. Vaitilingam, R 2010, Recession Britain. Economic and Social Research Council Veron, N 2012, ‘Financial reform after the crisis: an early assessment’, Peterson Institute for International Economics Working Paper 12-2 (2012). Vis, B, Kees, K and Tom H 2011, ‘To what extent did the financial crisis intensify the pressure to reform the welfare state?’, Social Policy & Administration 45.4 (2011): 338-353. Weber, O and Sven, R eds. 2011, Social banks and the future of sustainable finance. Taylor & Francis, Wessels, L, and Judy D 2010, ‘An investigation of consumer acceptance of M-banking’, International Journal of Bank Marketing 28.7 (2010): 547-568. Yousafzai, S, and Mirella Y 2012, ‘Understanding customer-specific factors underpinning internet banking adoption’, International Journal of Bank Marketing 30.1 (2012): 60-81. Read More