How to Rebuild Trust in Financial Institutions

I always enjoy reading Ron Shevlin‘s work. He is a senior analyst with Aite Group, where they say he is

“…a recognized thought leader for his pioneering research on right-channeling consumer interactions, the impact of customer advocacy on future purchase intention, and developing sense-and-respond marketing capabilities to improve sales and marketing efforts.”

I’ll buy that.

I also read his provocative and funny insights on his blog Snarketing 2.0 , so I was pleased that he linked to my March 27 post Why Should Your Clients Trust You? in his April 3 post on The Financial Brand, titled 9 Critical Ways Financial Institutions Should Rebuild Trust With Consumers.

In his post, Shevlin says that he has concluded “…that “trust” is too complex a construct to boil down to a simple formula. Trust is multi-dimensional, comprised and influenced by many attributes.”  I agree– I cited David Maister’s formula for trust in my post not because it’s the complete mathematical computation, but because it’s great shorthand for thinking about the way your (and your firm’s) behaviors impact how your clients perceive and trust you.

Shevlin cites Aite Group’s research that found nine critical areas that financial firms must address. It’s only fair that you read his entire post in context to get the whole list, so I will only quote the top three here:

  1. Have friendly and helpful service reps
  2. Listen to problems and concerns
  3. Empower employees to fix issues

None of the items on the list are any more complicated than that. So why is it so difficult for financial institutions to drive trust and brand loyalty?

The simplest concepts are sometimes the most challenging to implement. And the larger your firm, the harder it is to do it consistently.

I still go back to the whole “divided by self-interest” part of Maister’s formula.

If you can only implement one great idea– make it creating and nurturing a culture that really understands client needs and delivers what they want and need, in their best interest.

It’s usually easy to figure out “what’s in it for the firm” in any given interaction. Focus on “what’s in it for the client”.

Why should your clients trust you again?

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5 Responses to “How to Rebuild Trust in Financial Institutions”

  1. Ron Shevlin April 6, 2012 at 6:57 am #

    Thanks for the kind words. Here’s what I didn’t say in the Financial Brand article. Going back nearly 10 years now, I did research when I was at Forrester Research which found that the one thing most highly correlated a bank customer’s future purchase intention was that customer’s perception that the bank did what was best for the customer, and not just the bank’s bottom line.

    I called that customer advocacy (a term which got co-opted by the Net Promoter folks).

    Upon further research on exactly what advocacy was, guess what I found: It was driven by human-related, advice-related, and operational excellence-related factors.

    In other words, advocacy = trust.

    When you develop trust, you develop advocacy. They’re just two sides of the same coin.

    • JPNicols April 6, 2012 at 7:05 am #

      Thanks Ron, I agree (again). I am happy to tell you that I am aware of at least one FI CEO who is personally driving a “culture of customer advocacy”, particularly in the credit approval process. Of course, lending is the only practice that actually involves distributing a piece of the firm’s capital out to customers in hopes of getting a return of capital and a return on capital over time; so it’s easy to turn that into a completely shareholder-focused exercise. (On the other hand, I would not ascribe this as the primary driver of deteriorating trust in the industry…)

  2. neilstanley April 6, 2012 at 1:29 pm #

    JP,

    I appreciate your message here, particularly your phrase “driving a culture of customer advocacy.” We must move beyond self-interests to mutual-interests to restore trust in the banking industry.

    Neil Stanley

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