The bad news for banks: Barely one in five respondents said they had a great deal of trust in their financial institutions.
My take: What does it really mean when consumers say that they trust — or don’t trust — their bank or financial institution? Regarding the 21% of consumers who said they had a great deal of trust in their FIs: What exactly were they referring to?
Is is trust that their deposits will be there when they want to withdraw them? Is it trust that when they make a deposit that the correct amount will be credited to their account? Do they trust that that when their banks send them a statement that the amount on the statement is correct?
Is it trust that when the FI makes a product recommendation, that it’s right for that customer? Or is it trust that when their bank claims to have the best rates in town, the claim is true?
The article in American Banker that I pulled this data point from was titled “Can Banks Maintain Edge in Confidence Game?
There are two things wrong with this title:
- The term “confidence game” is often shortened to “con game.” Somehow, I don’t think that’s what the author was alluding to (or, at least, I sure hope it wasn’t).
- Banks (and FIs in general) have no “edge” in consumer trust.
Yes, banks were ranked third when looking at the top-box score. Interestingly, the article doesn’t report that stats for the rest of the scale.
But regardless of what the scores for the other scales were, this fact remains: 79% of respondents did not say that they a “great deal of trust” in their FIs. And the last time I looked, 79% qualified as “vast majority.”
Bottom line: Being ranked third on the top-box scale of Gallup’s trust survey is nothing to brag about. Consumers, in general, have little trust in the firms they do business with across a wide range of industries. And in tough economic conditions — especially those marked by crises like the credit crunch — trust scores are going to decline despite what firms do or don’t do.
One consultant was quoted in the article as saying “if banks persist in becoming even more aggressive in overdraft and nuisance fees, they will be putting their trusted positions at risk to a greater degree than the mortgage phenomenon.”
He was right on one point: That the fee issue is more important than the mortgage impact.
But he was wrong on another: It was the aggressive push for OD and nuisance fee income that helped to erode trust in the first place. You can’t “put your trusted position at risk” if you aren’t trusted already.
It’s too bad that the Net Promoter Syndrome sufferers spend so much time knocking satisfaction surveys for their fuzzy definition of satisfaction. Trust is an even more vague term, and arguably more important — especially in an industry like financial services — than either “satisfaction” or “likelihood to refer.”