Trust in banks is at a historical low, lower now than it was even throughout the darkest periods of the recession. Gallup’s most recent report states that a mere 21% of Americans have a great deal of confidence in banks. This trend is spanning incomes and shows no respect to political party lines. People do not trust banks like they once did and the result is a natural decrease in customer loyalty.
In our Most Engaged Customers study we found that trust is a key driver of Customer Engagement. It’s no surprise then that along with the dip in trust J.D. Power and Associates 2012 U.S. Retail Banking Satisfaction Study saw a two percentage point increase in the number of customers expressing intentions of switching banks. This is coupled with a loss of wallet share. Customers are expressing an increasing reluctance to reuse their bank’s products or services in the future and are hesitant to recommend them to friends and colleagues.
Winning back customer trust will start when banks begin doing the right things. Amazon users are familiar with how they assist in preventing double purchase, their system will automatically ask you if you are sure you want an item if you have already purchased it in the past. One of our banking clients has a similar practice, employees will encourage customers against taking out a loan that could turn into too great of a financial burden. This may not be in the best interests of the bank in the short-term, but over the long-term it earns the trust of customers.
Once banks are doing the right things they need to start thinking about how to do them with consistency – regardless of who is delivering it, or the channel they are using to access it. The recession led to a bloat of acquisitions, and in its wake many banks are still struggling to integrate the resulting disparate systems. These legacy systems are making it difficult for banks to meet the rising self-serve demands from customers such as remote deposit, mobile payments, and branch/ATM locators. But even more importantly, they are making it difficult for employees to gain the holistic view of customers’ financial needs to provide them with meaningful insight and service.
In addition to technology barriers, banks tend to take an inherently “company-centric” approach in how they are structured. Banks organize themselves around product lines (e.g. deposits, mortgage and home equity, customer lending). This siloed approach is effective in managing the banks various products and services, but again fails to consider the overall financial health of its individual customers.
Of course, even with technology innovation and a staff that is committed to creating an exceptional customer experience, mistakes still happen. The good news is that there is an opportunity to build customer trust if a bank can quickly and effectively resolve that problem. In the case of one of our retail banking clients, customers who were satisfied with the resolution of their problem were significantly more engaged (69%) than those who had never even experienced a problem to begin with (59%).
Trust can be regained, and the banks that focus their customer experience strategy on regaining trust have an opportunity to leapfrog competition that is still struggling to regain their footing after a tumultuous few years.
~Janessa Lantz
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