The one thing in this world that shouldn’t be broken is trust. According to Javelin Strategy and Research, banking is not about user-friendly applications, mobile transactions, branch locations, even interest rates or savings. It is all about consumers’ trust.
As per recent surveys, the least trusted industry in the consumer’s eyes is financial services. The Global Consumer Banking Survey, which conducted a study on 55,000 clients, said that 60% of global consumers believe that banks play an essential role in helping people achieve their goals. But consumers show a lower level of trust in traditional banks in fulfilling their strategic pledges. Less than 50% or exactly 48% of customers have complete confidence with their banks to keep their accounts safe. Only 26% of customers secure complete trust on their banks to provide unbiased financial advice.
Traditional banks are the sources of foundational financial strength, thanks to their familiar brand and branches. However, survey results show that consumers nowadays are troubled by this financial institution services. It is reflected in the conducted survey that the level of complete consumer trust in different types of banks. There are only 39% of the consumer-trusted banks with physical branches, 44% trusted Internet-only banks and 44% for other existing banking firms. The level of trust in traditional banks is slowly decreasing, and more and more consumers are looking for modern services in newly established financial companies.
Levels In Trusting Financial Institutions
Trust in financial institutions can be divided into three standards; Basic expectations, promises, and core values. Basic expectations show how the bank will protect the clients’ money, identity, and financial information. It is how consumers validate whether a bank is capable of protecting their rights as well as their financial status. Bank promises, on the other hand, talks about the bank’s recognition of its services. Banking intuitions should be able to uphold its services for the benefits of its clients. Core values mean that the bank should always consider its client’s position even if it results in lesser revenue or transactions.
These levels are the ideal requirements for every bank. However, it is not a prerequisite for every consumer. The third level (core values) is a non-negotiable requirement. Core values are the most important, and it drives trust and loyalty. Unfortunately, this is where most banks failed to fulfill. Results showed in the recent EY Global consumer banking survey that consumers trusted new players than traditional banks to provide unbiased advice.
The Useful Banking Resources
Therefore every data showed that banks have a trust problem, and trust is the ultimate necessity in an institution to client relationship. However, the way that trust flows through society is rapidly changing. Trust should be established through actions and not in words. Banks must take measures to develop a new level of consumer-based confidence to avoid loss. They should encourage a customer-centric culture by setting the right tone and giving the adequate incentives at every level of the organization. Transparency should be practiced by every financial institution and provide an explicit product detail to its clients. Cybersecurity threat is a worldwide problem, so banks should be able to protect its client’s personal information from being invaded by illegal organizations.
Most financial advice hold highly valued these days. Banks should be able to provide high-quality pieces of information to its customers and should have an unbiased overview in every client consultation. Financial institutions should expand into new territory to offer a new variety of safe services to its clients. Through this, clients can attain a certain level of confidence that their financial states are well taken care of.