Reading financial services: texts, consumers, and financial literacy

The authors focus upon the changing nature of production and consumption within the retail financial services industry. The perennial problem which faces all producers of financial services is information asymmetry; that is, providers and consumers of financial products have unequal amounts of information about whether or not customers have the wherewithal to make them 'capable' purchasers. Thus, the problem of information asymmetry is usually manifested in a priori decisionmaking about the suitability of customers. This problem has traditionally been overcome by forging interpersonal relationships of trust with consumers through copresence. Increasingly, however, trust in consumers is being forged through technologically mediated means of information collection functioning 'at a distance' so that financial services producers are coming to 'read' consumers as 'texts' through the medium of databases. These developments have had a number of effects, such as increased competition in retail financial markets, while branch networks, which acted as durable barriers to entry to the market, have become less important as sites of market intelligence and knowledge. Consumers have also been forced to forge new relations of trust with retail financial service providers. This is increasingly being achieved through the use of various media and through identification with brands. Such developments have served to create social and spatial divisions of financial inclusion and exclusion, as producers use at-a-distance information to discriminate between 'good' and 'bad' customers. Those 'inside' the financial system are able to use their financial knowledge to take advantage of increased levels of competition between financial service providers. However, those excluded from the financial system are doubly handicapped as they live in both a financial and an information shadow. Such individuals are likely to pay an increasingly heavy price for their exclusion, particularly given the collapse of universal welfare provision and the allied growth of private welfare-related financial products. In recognition of this, in the final part of the paper we consider ways of countering problems of financial exclusion and low levels of financial literacy.