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Can you trust your bank?

Banks in Australia and New Zealand are back to delivering strong results for shareholders. For them, if not for the northern hemisphere, the acute disaster of the global financial crisis has passed.

But even in the Asian region, where the most dire impacts were avoided, investor and community confidence remains a work in progress. One reason for this is the impact of a seemingly constant stream of banking scandals. Has the finance industry lost the faith of its key constituents, its clients and investing public?

"Today's consumer wants their financial institution to not just understand their accounts but their personal goals and values."
Lisa Henderson, Head of Corporate & Commercial Marketing at ANZ

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According to the latest Edelmen Trust Barometer Survey, one of the most-watched sentiment indicators, the public's view of banks and financial services remains low, with trust levels of 46 per cent and 43 per cent respectively. More than half of respondents (57 per cent) indicated they would refuse to buy products and services from a company they do not trust. Conversely, 76 per cent chose to buy products from companies they trusted.

Unlike reputation, which is based on an aggregate of past experiences with a company or brand, trust is a forward-facing metric of stakeholder expectation. Today's consumer wants their financial institution to not just provide a transaction account or loa, but to understand their personal goals and values. To grow, financial institutions need to understand they are really in the business of trust.

Just this week at a forum organised by the Australian Securities and Investment Commission, ANZ deputy chief executive Graham Hodges and former Citigroup CEO Vikram Pandit spoke about the critical importance of trust in financial services.

Pandit was particularly astringent, noting clients' trust in banks is deteriorating in the wake of ongoing scandals, opening the door for new technology players to take profits. Hodges conceded while Australia's banks had not lost as much trust through the crisis as global peers, financial planning scandals in Australia meant there were “quite a few issues" to deal with.

There are many ways financial institutions track their reputation including image metrics (do you put the customer first?), purchase intention, advocacy (would I recommend this bank?), corporate reputation (a clear strategy delivered with integrity), media publicity and a “net promoter score" (a further measure of advocacy which captures the share of the customer base who really do recommend the institution).

While banks such as ANZ are seeing many of these measures rise, the Edelmen Trust Barometer provides an insight into how consistently showing genuine behavior toward customers can have an impact on the bottom line. The barometer makes it clear engagement and integrity are key to building trust and loyalty with customers.

One very effective way to communicate your financial company has what consumers need is through fact-based marketing. While we all remember our last experience interacting with a bank for a much needed loan, long saved deposit or handy credit card, the question for we marketers is how can marketing enhance the experience and ensure commitments made are delivered?

In today's highly competitive banking and financial services market there are essentially three key characteristics marketers need to focus on to deliver a message with integrity:

  • Know your customers and communicate with them in meaningful ways.
  • Be meaningful and distinctive.
  • Be consistent and factual.

This sounds straightforward but remaining on message while adapting to new technologies and competitor activity is not easily done. We must resist the temptation to over promise and under deliver because this is a certain route to losing the trust of customers.

So here's my top six conditions when marketing to build trust:

  1. Honour your promises – the more exceptional and surprising the better
  2. Use plain english keep your message simple and straightforward
  3. Forge a connection – technology has multiplied our options so adapt your approach and use the right content for the right audience
  4. Ask for a recommendation – build a referral culture based on a trusted relationship (but don't expect an instant return)
  5. Back a cause – give something back and make it relevant and meaningful
  6. Be tech savvy – outdated technology and the miss-use of new technology for your audience means you are out of date

Building trust is also a function of leadership. Leadership drives engagement and can deliver the “mojo" that will make your brand or promise stand out.

Lead your team to participate in authentic conversations with customers - and communicate with truth and integrity. Use the right channels to communicate the right messages at the right time to demonstrate respect and understanding. Evaluate your approach and performance constantly.

It is easy to get caught up in the delivery of campaigns that drive revenue. We also need to take responsibility for the results and how they're communicated. Transparency of results and tight management of customer data is a real opportunity area to build trust.

Customer trust is fragile. From a global perspective, consumers in China are far more trusting (79 per cent) than those in Australia (58 per cent), the United States (49 per cent) and United Kingdom (52 per cent). While trust remains high in China, time will show whether their growing, affluent middle class move to display the same reduced trust levels as the West over time.

Ultimately, the resilience of a financial institution's brand, not its logos and colour schemes, rests on the sense of expectations it creates in terms of a consistent and superior solution to what the customer the customer actually wants.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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