Banks have a big trust problem, and they can—and must—address it, according to “How to (Re)Build Consumer Trust,” a newly released report from Aite Group. “Twenty three percent of consumers trust banks, but just 2 percent go as far as saying that they have a high degree of trust in banks,” according to the report. Trust is higher when it comes to customers’ primary banks, with 12 percent saying they have high level of trust and 45 percent saying they trust their primary institutions. The financial crisis and subsequent recession may be driving these low results, but that should not dissuade banks from taking action, because “banks require a high—not just a minimum—level of customer trust to grow and strengthen customer relationships,” Aite Group says.
“The numbers are not overwhelming in the least,” according to Ron Shevlin, senior analyst at Aite Group and author of the study. “There’s a huge difference between just okay and really good.” A high degree of trust is “very important in referral behavior and future purchases,” he notes. The higher the level the more likely customers are to refer others and expand their business with their primary institutions.
Trust is not “squishy,” says Shevlin, and it can be “taken down to the basic operational level.” Banks cannot “advertise their way to trust,” he believes.
So what can be done? Institutions need to emphasize sales process and deemphasize sales culture. During the past 10 years banks invested heavily on trying to “build a culture where any branch representative could identify new opportunities,” says Shevlin. “They spent a lot of money on training and implementation, and they missed the boat because they haven’t focused on process.” Sales processes can’t be completely scripted, but many details can be engineered.
Many banks already have an infrastructure they reposition for the sales side. These institutions have applied Six Sigma and other optimization initiatives on their back-office operations for up to 20 years. Now it’s time to apply that discipline to the front office “not necessarily with training, but with process redesign,” Shevlin adds. “Then banks should test a region, or a set of branches, before full implementation.”
The need for improved sales processes extends to bank websites, too. “Banks don’t treat online sessions as sales sessions,” says Shevlin. “Often there is no walk-though, no ‘let us help you find what you need.’ Banks need to improve their sites and tools.”
Over eighty percent if those surveyed say “insufficient skill, knowledge, [or] experience” drives customer distrust,” the Aite study shows. “They don’t care how friendly you are, if you’re helping them on the sales process side” Shevlin notes. Banks may think that customer inertia will offset the trust problem, but Shevlin isn’t so sure. “The reality is that the number of people closing accounts will be higher. Lack of trust may break the camel’s back.” Equally important, perhaps, is the goal that banks “build on a base of customers who want to do more,” says Shevlin.