As competitive liberalisation and the application of technology in the crea
tion and distribution of financial services have increased consumer choice
in the UK personal financial services industry, so consumer behaviour has a
ssumed a greater role in determining the strategic environment in which fin
ancial service providers operate. This paper explores the relationship betw
een consumer behaviour and the strategic choices facing financial service f
irms by developing a framework of consumer behaviour and linking the forms
of behaviour that flow from that framework with the distinctive characteris
tics of financial services. It is the interaction between form of consumer
behaviour and type of financial service instrument that determines the stra
tegic environment within which financial service providers operate. Based o
n that interaction the paper develops a contingency view of financial servi
ces strategy and argues that to be successful, financial service providers
will need to move away from broad service provision and adopt more focused
strategies that reflect far more closely the strategic environment in which
they operate.