In banking we trust…

Trust is a vital component of every relationship, not least in the relationship between banks and customers. Without trust a relationship crumbles. The recent financial crisis is still painfully fresh in our minds and has meant trust levels have ebbed to an all-time low, writes Jonathan Davis

Trust is a vital component of every relationship, not least in the relationship between banks and customers. Without trust a relationship crumbles. The recent financial crisis is still painfully fresh in our minds and has meant trust levels have ebbed to an all-time low, writes Jonathan Davis

Banks have a duty of care to customers but, in spite of this, it seems that they have lost sight of their real purpose in recent years. Changing societal norms, commercial pressures and very challenging sales targets have led to banks taking approaches that are not consistent with customers’ interests or their well-being.

Trust is not something that is easily regained but it can be done if the right steps are taken. Rebuilding it lies, at least part in striving for clarity and simplicity. Consumers are bombarded with information on a daily basis, on TV, via the internet, even during their journey to work on the tube. Banks must endeavour to keep their messages clear and their mechanics transparent. If banks are seen to strive to be open and honest with their customers, it will do a great deal to rebuild trust and to create a positive customer experience.

Banks should also not lose sight of one of their core purposes, which is to act as reliable and trustworthy financial advisors. The delivery of unbiased and personalised financial advice to customers can help to repair broken bridges and re-establish trust. The very positive change in the reward model that was driven by the Retail Distribution Review will help with this. Rebuilding trust is a journey rather than a destination but we have already seen the first positive steps being taken and banks are certainly heading in the right direction.

A strong, trust-based relationship with their customers will make it easier for banks to drive through necessary changes to their business models, such as dramatically increased levels of branch automation. Combining these cost saving changes with rapid rollout of flexible and functionally-rich ways for their customers to interact and engage with them can set banking on a new path. Providing an omni-channel experience with customers’ needs put first will go a long way towards demonstrating to customers that their needs are the banks’ first priority.