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Social Networks: Their Role in Access to Financial Services in Britain

Published online by Cambridge University Press:  26 March 2020

Pamela Meadows ,
Paul Ormerod  and
William Cook
Paul Ormerod
Affiliation:
Volterra Consulting Ltd
William Cook
Affiliation:
Volterra Consulting Ltd
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Abstract

Almost one in ten adults in Britain do not use mainstream financial services. Most of them are not in paid employment. However, most people without paid work have accounts. Two hypotheses have been put forward: (i) reluctance by financial institutions to serve low-income customers; and (ii) information failure on the part of non-consumers. Using two different data sources, we find that non-consumers of financial services are distinguishable from consumers only by belonging to social networks where financial services usage is relatively low. As social networks play a key role in transmitting information, this supports the information failure hypothesis.

Type
Articles
Information
National Institute Economic Review , Volume 189 , July 2004 , pp. 99 - 109
Copyright
Copyright © 2004 National Institute of Economic and Social Research

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Footnotes

The research on which this paper is based was funded by the Britannia Building Society. The Family Resources Survey 1997/98 data was supplied by the ESRC Data Archive by permission of the Department of Social Security. Neither the Data Archive nor the Department bears any responsibility for the analysis. The ONS Omnibus Survey data was commissioned by NIESR for this research.

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