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“Customers often entrust their life savings to financial providers, but just 43% of them believe that banks care about customers’ long-term financial well-being. In this digitized reality, trust has become a Key factor in fostering customer loyalty”— Paul Ebeling
With lockdowns forcing customers to rely on digital channels, there is more pressure on banks to convince customers they can be trusted to perform much wider and more complicated financial transactions.
Conventionally the majority of loan applications could only be managed at physical branches, but now for example there is an increasing demand for doing it online. This is why we see an increasing demand for mobile banking app development and cloud-based solutions.
While the digitization of services is inevitable, it has some negative consequences. By moving from offline to online, many banks struggle to maintain an emotional connection with their customers. As a result, relationships weaken, making it increasingly hard for banks to position themselves as institutions that customers can trust, especially in times of crisis.
Banks were meant to perform an important social function, which has become forgotten due to the rapid pace of technological advancements. We have learned that when people have to deal with serious financial difficulties, only 28% of them turn to a bank for financial advice.
In this context, turning the tide comes down to ensuring that communication with a human advisor appears as a significant event. It is Key for front-line bank employees to focus on establishing an emotional connection with the customers. These workers should transform from being a 3rd-party link between a customer and a service into a service itself.
To build more meaningful connections with the customers is to become proactive in helping them. Instead of waiting for customers to ask for advice, banks can offer advice based on the data they have. By providing a highly personalized service offering or even a piece of free financial advice, financial providers can move an inch further on their way to re-establishing trust.
All types of banking scams have grown in almost every part of the world. Not surprising, as VirusCasedemic-induced anxiety and an overall increase in digital transactions opened up many opportunities for wrongdoers.
Due to this, customers’ trust in banks significantly decreased. To address this issue, banks need to revisit their security protocols and ensure that transactions’ risks correlate with security robustness.
For example, if a customer needs to check their balance, device recognition, along with an eight-digit password, would be adequate means of protection. However, if it’s a new account opening or a big payment, facial or voice recognition or behavioral biometrics should be applied. This will make cybercriminals’ jobs much harder and show customers that security is taken seriously.
Other than that, there is still a considerable number of customers that willingly hand their data to fraudsters. This is why fraud education is Key, especially when it comes to the elderly. Sending e-Mails with basic warnings is not enough. These rules need to be told in person or by phone, and their importance needs to be emphasized. This will not only decrease fraud probability but also help customers to feel taken care of.
In banking, transparency can come in many shapes and forms. For example, clearly stating how long a particular transaction is going to take and actually keeping this promise can be highly valuable for an average customer. Proving to be reliable in the context of these seemingly little details can go a long way.
What is more, transparent, clearly written and straightforward terms and conditions without excessive law jargon can also boost customer trust. In fact, the 20th Annual Edelman Trust Barometer revealed that easily understood terms and conditions is the most important factor in increasing customer trust in financial services.
Apart from being a hard test of adaptability, our challenging times are also a perfect opportunity for banks to prove their integrity and transparency. Building trust in a digital world may sound complicated, but in reality, it takes the same principles that banks applied in their physical branches.
Remember, previously it took front-line employees to explain terms and conditions in person in a friendly manner. Today, a clearly written terms and conditions document should be easily accessed online, accompanied by a chatbot able to explain the peculiarities to customers on demand.
So, banks need to prioritize consumer trust and figure out how they can build more meaningful relationships with customers. Every transaction and customer touchpoint should be considered as an opportunity to gain trust.
Have a prosperous weekend, Keep the Faith!