In the past, customers often trusted banks on the basis of their scale, professionalism, and history. Today, customers are more likely to measure the trustworthiness of a bank based on their customer service and support. Customer-centricity is likely to be the key to winning over customers again.
Insight: Consumer trust is no longer driven by how long a bank has been operating, how stable it is, or how big it is. The key to regaining trust is putting the customer at the heart of the business.
Data: Leading the race for the most distrusted industry is the banking sector. (Roy Morgan Net Trust Score)
Key Action Point: Leaders in the financial services industry must think of this as an opportunity to strengthen or restore customers’ confidence in them.
Following the Banking Royal Commission, Australian customers have been left with a general distrust of the banking sector. The banking sector is one of the least trusted industries today, with many customers feeling that banks no longer put customers and their experiences first.
Disruption in Financial Services in the Age of the Customer
Customer trust is one of the major keys for businesses in the financial services industry. And once broken, it’s exceptionally difficult to reestablish. Following the Banking Royal Commission on Financial Services, customers don’t believe bankers are on their side. They are increasingly moving towards alternative financial services in order to avoid larger banks and credit institutions as they have been seen as increasingly untrustworthy.
With a low opinion of banks, consumers are less likely to open new banking products or engage in healthy borrowing practices. Banks need to recover their customer trust if they are going to be able to move forward.
Repositioning the Customer at the Heart of the Banking Industry
Modern customers are savvy and sceptical. Banks need to be truly willing to put their customers first if they’re going to reestablish a working relationship. This starts by repositioning the customer at the heart of the business. This can’t be done at a superficial level: it has to be done throughout all levels of the organisation to ring true.
To do this, we believe banks and financial institutions need to get at least four things right: be clear on purpose, meet and anticipate customer needs, build an internal culture, and improve your customer experience.
Let’s go deeper.
Define Your Purpose
What is your company’s reason for existing?
Is your reason for existing compelling to your employees and customers? If your purpose is only profit, then your business is going to be left behind. It’s a new evolution for financial services: an evolution that has to keep the customer in mind. Gone are the days when companies can be profit-centred and self-focused.
Your company’s purpose informs your company’s core values. What is your company doing to make the world a better place? How is your company truly improving upon the lives of its customers? Your company has to have something that differentiates it from the others, and it has to have a meaning behind it.
Many banks and financial institutions are now going through the process of rebranding. They’re finding their mission and their values and recalibrating their tone and focus. A brand often needs to reinvent itself to realign itself with its modern audience. Tastes and trends change over time: if you aren’t able to realign your brand regularly, you may be left behind.
Meet and Anticipate Customer Needs
In the age of the consumer, growth means being customer-centric. This means anticipating and meeting the customer’s needs — and putting the customer’s needs before profit.
Data can be used to identify trends, with research and analysis used to determine the evolving needs of a younger and more challenging customer base.
Banks have lost the majority of their customer faith by putting their own needs first. They focused on profit ahead of the ultimate results for their clients, and the results were ultimately disastrous for all parties.
In order to be respected and trusted again, banks need to begin looking at the customer’s needs before they look to their own.
Of course, that doesn’t mean that a bank is not a profit centre nor that banks cannot concern themselves with profit. It solely means that banks cannot put profit above all else. The customer always needs to be prioritised higher than profit, even if profit does come in second.
Be Accountable for Your Culture Within
There is a tendency within modern businesses — not just banks — to try to resolve all customer issues with technology. But this isn’t always the solution. Artificially intelligent chatbots and better financial platforms may help customers self-service, but it may not actually improve a customer’s impression of the bank or its branding.
Christine Crandell, from Forbes, said, “Relying on technology to fix customer experience without changing the culture and strategy will fail, every time.” While banks may be inundated with new technology, it’s not new technology that’s going to be able to save banks. It’s building a customer-centric culture and taking accountability for issues within that culture.
Accountability is key. Nothing can change until a company takes responsibility for its own actions. Companies must manage the potential gap between customer interests and that of the stakeholders, and they must be willing to put customers and their needs first.
Improve Customer Experiences
Modern businesses must be in a state of continuous evolution. They must be able to improve upon their customer experiences, by identifying potential patterns and trends and by proactively determining what their customers need. Banks have to be transparent in their onboarding processes and must be clear about the use of customer data. Customers are increasingly becoming more aware of how companies are using their data.
Frequently, banking companies are going to need to self-assess and determine whether their customers are presently satisfied. If they aren’t, they need to take action to find out how their customers would be better served.
Conclusion: Trust Takes Centre Stage
Achieving customer-centricity is not about compliance in order to create better results today — it’s about investing in a lifetime relationship with customers.
Right now, the relationship between customers and banks has been sorely damaged, and banks need to take initiative to repair these relationships. Gone are the days when customers had no choice but to deal with the major banks. Customers are increasingly being introduced financial products from everywhere in the world, including alternative types of financial product that may seem more authentic and more trustworthy.
In the past, banks have put profit before all else, and consequently, the relationship between banks and customers has suffered. Today, banks need to drill down to their ultimate goals for themselves and their customers.
Financial institutions need to identify their values and craft their mission statements for an evolving and changing world. By creating a value proposition and a strong, customer-centric culture, banks and other financial institutions will be able to provide customers with the services, products, and experience that they want.