Sudeepto Mukherjee, Financial Services Lead EMEA, Publicis Sapient
It has always been accepted that there is a strong correlation between Trust and business performance. A study by Interaction Associates showed that high-trust companies “are more than 2½ times more likely to be high performing revenue organizations” than low-trust companies. There is plenty of other research to support this.
Unfortunately for established banks, Trust has been a big issue in the years following the financial crisis and the subsequent banking scandals. A YouGov poll found that even 10 years after the crisis, two thirds of British people don’t trust banks. However, recent events like Cambridge Analytica and dramatic increases in data breaches and cybercrime have created uncertainty in the minds of users about both technology and the tech giants creating a renewed opportunity for established banks to regain leadership on Trust by addressing these concerns proactively and once more, turn that into a competitive advantage.
This new research corroborates that by finding that two fifths of Brits don’t trust challenger banks at all, while over half are worried technology will put their data at risk. This shows that legacy banks are still very much in the game. Whilst the shift towards digital banking is inevitable, consumer behaviour – namely trust, is still a concern/a hurdle to full adoption which gives the big, established banks of the high-street a fighting chance at maintaining their market share against the digital-natives and tech giants if they act now. Banking is increasingly ripe for disruption, and transformation in the financial services industry is not a strategy for future deployment, it’s a necessity now – whilst challengers are exactly that, challengers and not leaders.
Trust is primarily driven by 2 key factors – alignment to one’s values and the ability to uphold those values over time. The reason that USD is trusted as the global reserve currency is not only because of its stability but also because the US Central Banking system has maintained that consistency over 100+ years. While resilience over time creates a distinct advantage for the legacy banks over challengers, there is a bigger opportunity for them to strengthen that position by leveraging technology and digitisation more effectively and securely. The transformation has to be full-blooded to show that banks can utilise technology to not only meet customers changing needs but also uphold their values around ethics and sustainability in a secure environment. That’s why we advocate ethics and security as foundational elements in the design of all new platforms and experiences.
