How can the private and public sector work together to create the trust vital to drive growth?

The heady state of today’s geo-political climate has shifted the spotlight firmly to the role of the state. Yet against a backdrop of global uncertainty and recessionary fears, the role of the private sector in the UK growth agenda remains crucial – and making that real is more important than ever.

As we strive towards growth, the way private companies act is just as vital as the signposting from the state. Neither government nor business can deliver economic growth and wider prosperity – for customers and for the country – as effectively on their own as they can together. Success will be a collective endeavour.

For the UK to achieve its ambitions to deliver sustained G7-leading growth, both business and government will need to step up to the challenge. We need markets that customers believe in so that they have the confidence to put their money there: 64 percent of consumers will spend more with companies they trust. We need companies that really understand their customers’ needs and work to develop innovative products and services that satisfy them. And we need a regulatory and legislative climate that fosters customer centricity and innovation rather than strangling it with red tape.

Trusting in growth

But how can private sector leaders build that foundation of trust at a time when it is a commodity in such short supply? The latest Edelman Trust barometer finds public trust in both commercial and state institutions at historic lows – driven by geopolitical instability, the cost-of-living crisis, and increasing social and political polarisation. The good news is that businesses are better placed than most to respond. Across the board, people still tend to trust businesses more – or at least to distrust them less – than they do the government, the media, or NGOs.

The financial services sector may seem an unlikely poster child for trust, but it accounts for around nine percent of UK GDP – £208.2 billion – so must necessarily form an important part of any national growth strategy. And because there is typically a larger information gap between provider and customer in financial services than many other industries, it provides valuable pointers as to how a virtuous cycle of trust and confidence leading to growth can be (re)constructed – as well as a few warning flags about what can go wrong.

From rock bottom to blueprint

The financial crisis of 2008 now feels a long way in the rear-view mirror, but its effects were long lasting – and it’s crucial that we don’t forget the lessons learned. At the time, public trust in the industry, in financial institutions, and in the regulatory framework around it was all but destroyed. Since then, a combination of a greater focus by providers on real customer benefits, and a more progressive regulatory environment that focuses on good outcomes, has helped to rebuild consumer confidence.

Trust in the sector now stands at 62 percent according to the same Trust Barometer survey, the highest level since the crisis. And seven out of the top 25 most customer centric companies in Europe are in financial services, according to a 2022 Bloomberg survey.

Competition from new providers, new technology, and the clear costs of getting it wrong is the carrot that is driving a more customer-centric approach from the commercial side, while a shift from a predominantly rules-based regulatory system to a more principles-based approach has moved the legislative stick in the same direction. This is alongside the FCA’s ongoing work to streamline rules, reduce burdens on businesses, and improve customers outcomes; all of which stem from the FCA’s 2025-2030 strategy, which identifies supporting sustained economic growth and helping consumers navigate their financial lives as key strategic priorities.

Consumer Duty, introduced by the FCA in 2023 and described as the centrepiece of future financial regulation, applies to all organisations offering financial products and services to consumers and some SMEs. These rules are intended to narrow information gaps, improve understanding, and in turn ensure that more customers can participate in financial services.

It marks a significant move away from previous attempts to have an overarching principle – such as treating customers fairly and not being unclear, unfair, or misleading – to the overarching principle of acting to deliver good outcomes for customers and providing evidence that these outcomes have been achieved.

Consumer Duty has already led to a much greater appreciation of customers’ individual needs – vulnerable customers in particular. An FCA review found that customers who are vulnerable consistently report poorer outcomes than those who are not, and that improvements in the way firms identify, support, and monitor these customers are required to level the playing field.

Many firms are working on this, and we have seen and supported some great innovation – driven by a proactive mindset shift to organisations’ overall approach, rather than as a one-off response to a regulatory change. We’ve worked with banks to adopt ‘Inclusion by design’ approaches to ensure they’re not inadvertently excluding customers. And we’ve also seen this approach successfully applied in technology-enabled care – where we worked with private and public sector organisations to solicit feedback from vulnerable users, care professionals, carers, and care workers. As well as helping to refine product and service development, this approach increased referrals and boosted confidence in the quality of care received.

This combination of more customer-centric businesses and more customer-centric regulation promises a win-win path to growth – and steps away from the misconception that more regulation means less growth.

Appropriate customer-centric regulation – such as the type we helped the Building Safety Regulator implement to maximise safety for high-rise residents – can build trust and ultimately encourage growth by fostering stable, transparent market conditions. To achieve this, we’ve supported regulated firms to more clearly articulate what good outcomes mean to customers at a product and service level. And we’ve then supported them with the data and governance tools to ensure that they can foresee potential harm and act to prevent it.

Customer-powered innovation

The principle that greater customer centricity leads to more innovation and sustainable growth also applies in less heavily regulated sectors – and we can look there for a good exemplar. The app economy is notorious for ‘here today gone tomorrow’ stories of start-ups which take off like a rocket only to come down like a stone, but commuter travel app Citymapper defies this easy-come easy-go stereotype. Founded in London in 2011, It now has over 50m customers and covers well over 100 cities across the UK, Europe, US, Asia, and South America.

It has achieved this success by unerringly putting its customers at the heart of its product. Users can vote for the next cities to join the app’s roster, and before a new destination is added a ‘Travelling Circus’ team lives there for a month, switching accommodation weekly, taking the same journeys, and sharing the same frustrations as the people who will ultimately be their customers. The result? Safe walking routes that stick to main roads at night, and rain-safe options that keep users as dry as possible when the weather is wet.

But while competition and regulation are key external factors, customer centricity also comes from within a business. It’s cultural as well as strategic – having people who want to help the customer, systems and processes that allow them to do so, and incentives which recognise that sustainable revenue growth and profitability are rooted in a relentless desire to make customers lives that bit easier, more fulfilling, and ultimately more productive.

One impactful – and relatively simple step – we’ve seen work, is for organisations to be more open to receiving, acknowledging, and acting on complaints, because these are an opportunity for feedback and a chance to engage with customers.

If the regulatory climate can truly foster customer-centricity and innovation, and if private sector organisations strive to better understand and deliver against their customers’ needs, then growth is within reach.

Moreover, it’ll be sustainable growth driven by meaningful outcomes: inclusive products and services; quicker resolutions; innovative products and services; tangibly positive impacts to people’s lives; and the trusted organisations we need for the decisive decade ahead.