Customer trust:
without it, you’re
just another bank
Part of a series of articles exploring
key themes from EY’s Global Consumer
Banking Survey.
2|Customer trust: without it, you’re just another bank
Heidi Boyle
Principal, Financial Services Advisory
David Ebstein
Partner — EMEIA Head of Digital Financial
Services
Teresa Schrezenmaier
Director — Strategy and Customer
Anna Slodka Turner
Director, Financial Services — Research
and Comparative Analysis
| Introduction
Trust is essential to relationships in all facets of life — personal, professional and fnancial.
We trust airlines to deliver people and luggage to the right city, safely, on time and
in good shape. We trust grocery stores to provide safe and healthy food — effciently,
conveniently and cost-effectively. And we have long expected that banks and fnancial
advisors will do the right thing for their customers.
But trust is often found wanting in today’s
banking relationships, presenting a challenge
for both consumers, who want to trust their
banks, and for fnancial institutions, which
need trust to retain customers and grow their
business. Banks consider trust a strategic
imperative both because it is a key predictor
of advocacy and future business and because
the impacts can be highly destructive if it
is eroded. The stakes around trust have
never been higher than they are today,
with trust-breaching incidents having far
reaching consequences and a new generation
of competitors ready to exploit consumer
skepticism regarding traditional banks.
Findings from EY’s 2016 Global Consumer Banking Survey contain both good news and
bad news in relation to trust. On one hand, banks are largely trusted to keep consumers’
money safe. On the other, relatively few consumers completely trust banks to provide
unbiased advice that puts their needs ahead of the banks’ objectives. Traditional
banks also fall behind non-traditional competitors relative to transparency of fees and
recommending products and services most relevant for their customers’ needs.
All is not lost, however. The gap is not large and traditional banks have certain advantages
to build on as they seek to increase levels of consumer trust. Their scale, long relationship
histories and well-known brands mean traditional banks are well positioned to rebuild trust.
The goal should be to convince customers that banks always have their best interests at
heart and are committed to improving their fnancial well-being.
This article will explore a range of trust-related issues for banks, with analysis and ideas
about how banks can strengthen consumer trust. The recommendations are illustrative
and are meant to be neither prescriptive nor exhaustive, largely because there is no
cookie-cutter approach to building and maintaining trust. Differences in size, products,
customer segments, culture and value proposition dictate that each organization must
defne what trust uniquely means for their business and what they want to stand for
in consumers’ minds. Then, individual banks must proceed to building solutions and
consistently delivering experiences that are in line with that vision.
About the survey
EY’s 2016 Global Consumer
Banking Survey set out to measure
the state of banks’ relevance
to consumers’ lives. More than
55,000 consumers participated
in the survey, which was conducted
in early 2016.
3Customer trust: without it, you’re just another bank |
| Perspectives on trust
In the past, some industry veterans may have viewed trust as a
vague, qualitative metric. That is no longer the case, even if trust
remains somewhat diffcult to measure accurately and, therefore,
challenging to manage effectively. But trust is a real and important
consideration for consumers, who experience it as a feeling that
is built over time or, in some cases, irreparably broken in a single
transaction. Changes in trust result in actions that have direct
business impacts. When serious breakdowns in trust occur, the
consequences can be severe for banks.
Because trust can be an elusive concept to grasp, it is useful
to dissect its positive and negative implications, as well as
expected and differentiating characteristics associated with it.
The foundations of trust are built on fulflling the most basic
expectation that consumers have of all fnancial institutions:
to protect their money and identity. While satisfying this
fundamental expectation won’t necessarily help traditional banks
fend off new competitors, violating it will absolutely encourage
consumers to entertain the possibility of moving some or all
of their banking relationships. The availability of intriguing
alternatives and new, nontraditional fnancial services providers
gives consumers more choices to consider in their search for
more trustworthy options. The negative consequences of basic
trust violations in banking are more pronounced than they are
in other industries, given the fnancial and emotional aspects
associated with safeguarding one’s money and sensitive
fnancial data.
The next level of trust is based on tactical “promises” that banks
implicitly or explicitly make relative to transactions or tasks
(e.g., that deposited money will be available after a certain time
period or that mortgage applications will take no more than an
hour). These typically relate to the core services offered by most
institutions. Such commitments are similar in nature, albeit with
varying degrees of timeliness and accessibility. The impact of
not delivering is more negative than positive — that is, it’s more
common to frustrate customers who experience errors than to
delight them through competently processing basic transactions.
However, the negative impacts are not as severe as with the
foundational or tactical levels of trust, because most operational
errors can be corrected fairly easily and quickly.
Nevertheless, there are clear opportunities for differentiation
through operational excellence, particularly via user-friendly
digital devices and seamless integration and data sharing across
channels, and through rapid and effective problem resolution
when errors do occur. Because consumers are more likely to
use traditional banks for complex products with inherently more
operational risk (such as loans, lines of credit and investment
products), it’s essential that banks master these basics and not
gain a reputation for being diffcult to do business with.
The highest, most strategic dimension of trust is centered on
aspects of relationship building, such as banks’ willingness and
ability to do the right thing by their customers. This level of
trust speaks to a bank’s ability to keep its brand promise and
consistently deliver products and services that contribute to a
consumer’s fnancial well-being. Some policies and procedures
are already in place to help fulfll this brand promise (e.g., rules
to confrm suitability of investment products for individual
consumers and consultative sales processes designed to
help representatives understand customers’ needs before
recommending products).
However, cultures that are focused on — and even obsessed
with — building long-term, trusted customer relationships are
necessary to improve the business upside of trust. That requires
the entire organization to be wired accordingly, with the right
measurement and incentive systems, well-designed customer
experiences and enabling technology all aligned to the goal of
winning and preserving consumer trust. In such an environment,
people at all levels of the organization, from front-line sales and
service representatives to back-