The trust paradigm
In the good old days, customers’ trust in banks was almost implicit. Individuals let them look after money with incredible loyalty whilst also taking heed of advice. There was a shared belief that the banks had the customers’ best interests at heart.
But since the banking crisis of 2008, added to the exposure of PPI mis-selling, this implicit trust has been eroded. Consumer surveys consistently find that the financial services industry is one of the least trusted sectors.
It’s a slow crawl back and, at the same time, an uphill climb as consumers have been empowered and have found their voice through online channels. But what can the banks do? In an interview with the Daily Telegraph, Antonio Simoes, UK chief executive of HSBC said:
What banks need to do to be trustworthy is one thing, but what society then does to trust banks is another.
Simoes’ comment is telling. In a “them and us” situation banks can do so much but if their audience is switched off to listening, how can they even begin to gain their trust?
From the banks’ side, the business case seems like a straight forward calculation: advocacy and trust will retain your customers, win new customers, and earn you more business with those same customers. But again, how can advocacy be achieved and “them and us” be united? My answer to this is to focus on two key elements:
1) Connect with the people &
2) Protect the people.
These two key elements will strengthen trust and build reputation in turn.
Connect with the people
Through their established institutional nature, banks can sometimes seem detached from the real world. Yet, a significant 7% of working age people in the UK work within financial services. That’s a lot of “us” who can help make the industry a little more tangible, real and approachable. That’s also quite a few people who can help rebuild a somewhat damaged collective reputation. Extend out the influence through family and friends, and the trust, in turn, could increase again.
This notion is backed up by the fact that family and friends, consumer reviews and independent experts are, nowadays, the most trusted sources of information. A Salesforce study found:
40% trust online reviewers most, followed by 24% who find the influence of family, friends and colleagues to be key.
Specifically in the banking space, a survey Boston Consulting Group found that 50 percent of decisions to join (or to avoid) a specific bank were influenced by recommendations from family, friends, acquaintances, or online public forums.
It is something that non-financial b-2-c brands achieve with ease. But then this is something that is often built within a new brand’s personality. For example, it is defined that the brand will have an easy tone of voice, be approachable and friendly. Just think of Innocent smoothies, they have all the right brand characteristics to partake in some light-hearted banter with customers via their twitter channel. However, traditional banks don’t have the same DNA; they have to slowly change over time due to their institutional size.
That’s possibly why the Atoms and Monzos of this new world are doing so well. These Fintechs are shiny, new, with a fresh tone of voice that seems more real to the Millennials than the voice of an established bank.
And this is not just about having a voice, it is also about having an ear to listen with. This is about two-way communications which should be as transparent and honest as possible. Listening to social is not all bad news. Social@Ogilvy found 19% of social media users globally actively recommend brands to others.
There are many opportunities for bank brands to continue conversations online and to gain important feedback through these “real” channels. Yet, this cannot all be achieved through words, emojis and memes alone.
One example of proactive innovation in the industry is video banking. In a Vidyo survey of 3300 retail financial services companies in more than 130 countries, more than 80% were planning to offer such a service. The driver? Increased customer engagement, and therefore an opportunity to demonstrate trust, and the chance to improve Net Promoter Scores.
A step forward, but what other action does the banking world need to take?
Protect the people
Just a couple of decades ago, it was unimaginable to think of the new ways data would be used in our everyday lives. Customers have a right to be wary. With the growing use of big data, the internet of things (IOT), artificial intelligence and machine learning, deeper use of personal data is becoming the norm.
Research by the Information Commissioner’s Office (ICO) shows only one in four UK adults currently trust businesses with their personal information.
In 2017 protecting the customer is really a fundamental activity for banks. Although high street banks are the most trusted businesses to properly handle personal data, they have still felt the repercussions of the general increase in UK consumer mistrust. This is a landscape in which customers believe brands have the ability to misuse their personal or transactional data. High profile cyber security failures and increased consumer fraud have certainly added to this mistrust.
As digital banking develops, with new services and increased customer take-up, the number of vulnerable customers grows. Nearly 80 percent of bankers strongly agree that they are exposed to more risks than they are equipped to handle as a digital business. Eighty-five percent say that as data-centric products and services put data handling concerns in the spotlight, companies are exposed to exponentially more risk.
Yet, it is fundamentally important that banks keep on talking about cybersecurity. It is a big concern for customers. Nearly two-thirds, or 60%, of global consumers worry about the hacking of bank accounts or bank cards, and 59% worry about the amount of personal information that private and public sector organisations have about them.
With the arrival of the General Data Protection Regulation (GDPR) in 2018 the balance of power is swinging further in favour of the customer.
Banks need to demonstrate that they are proactively protecting customer data as if it was their own and defending against cybersecurity threats. There is an opportunity to show the significant work that is being done in the background to keep individuals safe. There is also work to be done to educate customers in terms of their own cybersecurity and what personal steps they can take.
Despite growing up with the internet, Millennials are surprisingly the most common victims of cybercrime. According to a Norton Cybersecurity Report, 40% of Millennial respondents had experienced cybercrime in the past year and there is an indication that this younger audience is somewhat slack on security habits. Here is an opportunity for banks to play a part in this education through their marketing and communications. When customers can see that the banks are on their side in the fight against cybercrime, trust will build.
Love the people
In the digital age of people power, sustainable success depends on building and maintaining high levels of advocacy and prizing trust through Connecting with the People and Protecting the People.
Banks need to mobilise their own people to help connect with their audiences. At the same time, they need to get on with the tough stuff and live up to their promises to protect customers.
There is scope for banks to, once again, be the bastions of protection although today this role is more about guarding customers against threats like cybersecurity. Ultimately, banks really need to love the customer.
Work on these elements, then trust will build with most loyal followers; be they colleagues or customers.