Building trust in financial services when it comes to data

By Martyn Wilson, UK FSI lead at NetApp

The past few years have seen seismic changes taking place, not just in the financial services sector but in the entire global economy. During the pandemic, cashless payments were viewed as safer and the rise of cashless payments and different ways of accessing financial services has continued.

The decline of bricks and mortar banks and the increasing use of online banking services has meant almost half of the UK’s banks closed their doors between 2015 and the end of 2021 (Source). Financial services customers are now accessing banking via digital channels such as mobile applications and even chatbots. In the UK 72% of customers prefer to access information and services via their provider’s website for more transactional requirements such as paying online, setting up direct debits and seeing account balances, according to NetApp’s recent research.

During a cost-of-living crisis personal finances become more important than ever, and customers want to trust their banking services both physical and digital. There is an opportunity here that financial services should not miss – to build proper, long-lasting trust with customers digitally to foster loyalty and to encourage them to stay with them as a financial services provider, especially in an age of challenger banks.

What has happened to consumer trust in financial services this past year?

Unfortunately, over the past year, little has changed when it comes to consumer trust in the financial services sector. Last year, NetApp released research which found that consumers trusted their banks to protect their money, but not their data. 80% of Brits stated that they feel their money is safe at their bank, but only 66% feel the same when it comes to their personal data. A year on, worryingly, the sentiment remains the same. 78% of respondents from the UK agree that their money is safe at their bank, whereas only 60% feel the same about their personal data.

It is clear from NetApp’s research that there is an issue when it comes to consumers trusting financial services with their data. What is more perplexing is that consumers are more trusting with their money and livelihoods – so what is the issue when it comes to consumers trusting banks with their data?

Financial services need to be alive to the issues that have come with the shift to online and digital. There are some key steps that banks can take to gain consumers’ trust.

1. Putting the human at the centre of financial services

When consumers think about digital financial services, what often springs to mind first is the speed, agility, and convenience that they offer. Automation in financial services is currently a bit of a double-edged sword, as while it helps online banking to be fast, it falls short when it comes to helping customers make those major decisions online. For instance, customers do not feel that they can rely on the advice of chatbots and robo-advisors. Despite the convenience that chatbots can offer, 71% of consumers prefer human interaction for opinion-based, advisory support such as mortgages where they need that human opinion and reassurance around those major financial decisions.

The key to building trust with consumers here is ensuring that customers have access to a chatbot only when that is deemed appropriate for their particular enquiry. It is about being smart with automation and giving customers that choice when it is right, not thrusting a chatbot at them when they have a complex or personally difficult enquiry that they would like resolved in a certain way.

1. Educate

Almost half of those surveyed by NetApp would use online banking more often if they knew more about the safety of online banking and over two thirds are concerned that their personal data may be stolen when using third party providers. It is clear that consumers are safety-minded and banks need to do much more to reassure and educate them around online safety; banks getting this right could bring about an industry step-change in consumer trust and fundamentally encourage people to use their products and services.

Online banking providers can educate customers not just around issues such as fraud and scams but also in what they are actively doing to protect customers. As consumers make increasingly crucial financial decisions online, they want to feel reassured and trust those who provide those products and services.

1. Innovate

Many financial services providers have simply evolved their products and services to be similar to their ‘bricks and mortar’ offering, as opposed to building digital services from the ground up. Online banking providers should think about how they can get the essentials spot on by prioritising integrated communications, new content programs and personalised customer journey maps and personas. Proper data handling should be the north star for financial services innovation and by zeroing in on its potential, customer experience can be transformed for the better.

Banking providers can also help to reassure customers around digital safety by continuing to innovate around current digital setups, so that banks lean into digital while also reassuring customers at the same time. Online banking providers should think about choosing technologies that provide smart digital banking experiences, regardless of where they are being accessed from.

Building consumer trust successfully when it comes to data

As NetApp’s recent research has laid bare, there is much to be done when it comes to building trust in financial services. From educating customers about scams and online safety to the need for banks to be more human-centric, there is no shortage of things that financial services organisations can do to help consumers adapt to the changing digital financial services environment and to build trust in the process.