Consumer trust in banks is low – and if banks don’t do something to fix it, they won’t be able to grow and strengthen customer relationships.
Boston, MA, April 29, 2009 – A new report, issued jointly by Aite Group, LLC and Plenitudes Prospective & Management, evaluates consumer trust in banks and outlines the significance of trust from a marketing standpoint. Based on a February 2009 survey of 1,222 consumers in the United States, United Kingdom and France, the report identifies the role consumer trust plays in a bank's ability to win and develop business, and identifies the key drivers of bank trust.
It is no surprise that consumer trust in banks is low given the current economic condition and the global financial crisis in 2008. What makes this a cause for concern at banks is the degree to which a bank's ability to grow deposits is affected by consumer trust. Consumers that have a high degree of trust in their bank are twice as likely to open new accounts with their bank as consumers who only trust their bank somewhat. In fact, consumers who said they trust their bank "somewhat" were barely more likely to expand their relationships than consumers who didn't trust their banks at all.
"Banks have deceived themselves for a long time about the extent to which their customers trust them," says Ron Shevlin, senior analyst with Aite Group and co-author of this report. "Consumers may trust that the US$100 they deposit today will be there tomorrow, but that's just a tiny element of consumers' trust. Consumer perception of trust is shaped by the degree to which banks are easy to do business with, the extent to which they respond quickly to requests and inquiries, and banks' ability to make their rates and fees clear - all of which banks score poorly on."
Recent bank advertising designed to garner consumers' trust are unlikely to pay off, however. Of the many attributes that influence consumers' level of trust in their banks, rational attributes (like operational performance, and quality of advice in sales interactions) were considered more important than emotional attributes (like having a good reputation and living up to the values portrayed in ads).
According to Shevlin, "the key to rebuilding trust lies in improving key business processes like sales and customer onboarding, and by tracking actual referral behavior, rather than simply considering customers' intention to refer the bank."
This 34-page Impact Report contains 20 figures. Clients of Aite Group's Retail Banking service can download the report.