The future of banking is built on trust. Considering the current volatility in financial markets, the unraveling of the trust crisis ensuing the collapse of Silicon Valley Bank and Credit Suisse, and the impact of inflation and the cost-of-living crisis on customers’ personal finances, earning and maintaining customers’ trust is an imperative. Forrester defines trust as: confidence in the high probability that a person or organization will spark a specific positive outcome in a relationship. Customers want to feel confident that their financial services providers are reliable and trustworthy. They also expect genuine empathy and care from the firms to which they entrust their nest eggs and financial hopes.
Earlier this year, we launched the Financial Services Customer Trust Index to assess the level of trust that customers have in their financial services (FS) providers. Sadly, customers in France, Germany, Italy, and the UK generally rate their trust toward their banks as weak or — at best — moderate. Our 2022 consumer survey data reveals that:
- Only 48% of UK banking customers believe that their primary bank demonstrates empathy.
- Only 57% of French banking customers feel that their primary bank performs well on dependability.
- Only 59% of Italian banking customers say that their primary bank shows transparency.
Measuring How Well European Financial Services Brands Earn Customer Trust
While financial services leaders intuitively agree that customer trust is important, they lack a clear understanding of what drives it and how to measure it — so we developed the FS Customer Trust Index to measure a brand’s ability to earn customer trust. As our research shows, firms stand a chance to reap financial, competitive, and reputational benefits when customer trust is strong. When it’s weak, they lose those benefits and must fight harder to win business.
Our customer trust measurement methodology goes beyond simply assessing the level of customer trust by generating a unique benchmark. It also offers a strategic roadmap for building trust in any given market and prioritizing specific enhancements most likely to boost revenue and yield additional benefits. Using scoring models, we identify key trust levers that significantly impact customers’ trust. The unique combination and prioritization of these levers forms the trust blueprint, guiding financial services firms to effectively strengthen customer trust.
We identified empathy and dependability as the most influential levers of trust for banking customers in France, Germany, Italy, and the UK, yet only about half of consumers in these four countries believe that their main bank shows empathy. Banks have an immediate opportunity to earn their customers’ trust if they prove to be emotionally connected to their customers, reliable and available when it counts, and responsible and true to their word.
The Benefits Of Earning Trust Go Hand In Hand With The Costs Of Losing It
Customer trust is dynamic and can fluctuate, presenting both opportunities for growth and challenges to overcome. Through our surveys and data analysis, we were able to confirm vast behavioral differences between customers who either trust or distrust their banks. These behaviors translate into four distinct outcome categories that extend to:
- Revenue. Customers with high trust in their bank will buy additional products or services from that brand, prefer that brand over its competitors, and refer or recommend a friend or a family member. Customers with low trust will most probably not.
- Engagement. Customers with high trust in their bank will readily engage with the brand more often, share more personal data and information about their lifestyle goals and preferences, and be more responsive to various communications. Customers with low trust are unlikely to do the same.
- Forgiveness. Customers with high trust in their bank will forgive a brand for product-related mistakes and give a brand a second chance in case of an ethical breach involving certain executives. Customers with low trust will not be so lenient and instead will be more likely to sever their relationship.
- Brand. Customers with high trust in their bank will try other services offered by the brand, even if they are unrelated to their core offerings, and will trust other companies that are affiliated with the brand. Customers with low trust are less likely to follow suit and instead will shun that brand.
Trust Is Hard To Earn And Easy To Burn — How Forrester Can Help
Trust isn’t abstract; you can earn it and strengthen it. Every engagement with a customer is a chance to earn, reinforce, or, on the flip side, destroy trust in your brand. To increase customer trust, financial services brands must design and execute deliberate trust strategies — but before that, they must first stop guessing and start measuring customer trust to understand what drives it. To get started:
- Use the FS Customer Trust Index to assess trust in your brand. Our Customer Trust Index methodology can help your organization assess customer trust of your brand and what drives it. You can use that information to form long-term trust-building strategies equipped with knowledge about the current trust gaps and blind spots.
- Develop a deliberate action plan. You can’t address all trust drivers for every audience and region at once. Forrester’s FS Customer Trust Index can help you understand and prioritize the drivers that are most likely to have a meaningful impact on perceptions of trust for a given audience.
- Benchmark against your peers and set trust targets. We can help you benchmark your firm’s customer trust levels against relevant peers in your geography and set a strategic trust target appropriate to your business. Trust targets will help track and embed strong accountability mechanisms in your overall customer strategy.
- Align trust with and integrate trust into your customer experiences. Use Forrester’s data-driven frameworks to connect trust with every aspect of your customers’ experiences. Forrester’s Customer Experience Index (CX Index™) shows that higher trust often correlates with higher CX quality and drives loyalty behaviors such as retention, enrichment, and advocacy.
Please read the full version of the reports for more details such as country-specific customer trust scores, analytical insights, relevant examples, and specific recommendations:
- The France Financial Services Customer Trust Index, 2022: Banks
- The Italy Financial Services Customer Trust Index, 2022: Banks
- The UK Financial Services Customer Trust Index, 2022: Banks
If you’re a client and would like to discuss these topics further, feel free to schedule an inquiry.
(Hannah Bradbury contributed to this blog.)