With cybercrime on the rise, customers expecting a better online banking experience, and more players in the market, organisations should push for positive reviews, cut back on nuisance communication, and be transparent
American business magnate Warren Buffett’s warning that “it takes 20 years to build a reputation and five minutes to ruin it” is a precious lesson worth heeding by financial services operators seeking to generate trust in the digital age.
After working hard to claw back favour following the global economic crash in 2008, the industry generally impressed during the pandemic. But with cybercrime on the rise, customers expecting a better online banking experience, and more players in the market, building trust is increasingly challenging.
A report published in April by global cybersecurity company Imperva, based on responses from almost 7,000 consumers across Australia, Singapore, the United Kingdom, and the United States, found that 63% of people don’t trust financial services organisations to keep their data safe. Clearly, there is much work to do.
Here are five ways financial services operators can build trust in the digital age.
1. Actively push for positive reviews
When was the last time you didn’t buy something because a bad review put you off? It’s the same for financial services operators. Hence why those in the sector must do more than monitor online reviews, suggests Jeremy Helm, a financial analyst at Modern World Business Solutions. “You need to be actively pushing to gain positive reviews,” he says. “You can set up an automated email via Trustpilot that goes out a week after a purchase is complete.”
And if the reviews are not favourable, learn from them. “Don’t ignore them,” continues Helm. “Others will be reading the negative reviews before making a purchase, so make sure to answer the complaint promptly and politely. But also, if you’re not to blame, there is nothing wrong with highlighting where the issue lay respectfully and factually.”
2. Cut back on nuisance communication
A recent freedom of information request, made by customer communication firm Quadient, showed an increase in spam communications from financial services operators over the past year, which is eroding consumer trust, according to the company’s principal of banking and financial services, Andrew Stevens.
“Operators urgently need to cut back on nuisance communication – irrelevant or non-useful contact, which only damages trust and drives customers away,” he says. The FOI request showed 8,796 banking-related spam calls and texts were reported to the Information Commissioner’s Office in 2021 – 38% higher than the 2020 figure. Additionally, insurance-related nuisance calls and texts rose by 40%, with 3,989 complaints.
“Our research shows 43% of consumers are willing to blacklist businesses for sending spam,” continues Stevens. “Instead of bombarding customers with irrelevant offers and deals, they should remember that every piece of communication is an opportunity to win customers’ trust. For instance, by providing useful information to help them save money amid the ongoing cost-of-living crisis.”
3. Learn from tech titans and be clear about values
“Interestingly, the five most trusted brands across any industry globally are all large-scale tech firms,” says Nick Chadbourne, CEO of LMS, which supplies conveyancing services. “They provide a seamless cross-platform experience that is personalised to individual users. Google is probably the best example.”
He spots a paradox, though. “These companies are probably utilising our data for commercial gain more than any other business. Yet, there is a perceived trust from consumers. This is partly because of how these businesses fit with their values. But also because they deliver great customer experience and hyper-personalisation. Financial services firms could benefit and build trust by taking a similar approach.”
Sébastien Marotte, president of EMEA at content management company Box, agrees. However, he calls for greater clarity about data use. “The best way for financial service organisations to build and maintain trust is through open and transparent compliance reporting.”
4. Don’t forget the importance of human touch
Financial services organisations collect more information on their customers than any other industry, according to Adam Mayer, a director at data and analytics firm, Qlik. “Trust is imperative to this industry – and needs to be built from the ground up,” he says. “Don’t forget the importance of a human touch when building trust in digital technologies.”
While AI and predictive analytics can generate powerful recommendations, employees will provide oversight into actual decision-making, Mayer adds. “And, more importantly, they will explain those decisions to the customer. Blending human and machine insights improves the accountability actions being made, which helps smoothen some of the hurdles around trust and regulation.”
Additionally, ensuring employees have the requisite data literacy to understand, question and apply the predictive forecasts to their decision-making process is critical.
5. Show your AI workings
As more financial services are investing in AI solutions, it’s vital to show how decisions have been made. “Explainable AI addresses one of the key issues for banks using AI applications, as they typically operate as ‘black boxes’ offering little if any discernible insight into how they reach their decisions across lending and fraud detection and to improve customer service,” says Hani Hagras, chief science officer at banking software company Temenos.
He provides an example. “With buy now pay later (BNPL), Temenos Explainable AI provides additional transparency, enabling the customer to understand why a particular flavour of BNPL was recommended to them and make an informed choice. This increases trust in the BNPL service and puts the customer in control.”
This article was first published in Raconteur’s The new financial services client experience insights report, sponsored by Seismic, in August 2022