Alyson Clarke, Principal Analyst and Tom Mouhsian, Principal Analyst
Forrester’s recently released Financial Services Customer Trust Index reveals weak trust in the industry. Surprised? In this episode, Principal Analysts Alyson Clarke and Tom Mouhsian discuss the findings of Forrester’s FS Customer Trust Index, which shows that finserv brands don’t understand the basic drivers of consumer trust or which levers they should pull to grow their trust.
“Trust in financial services brands is surprisingly weak, and we’ve been seeing very few brands with strong levels of customer trust,” says Clarke, adding that only 2% of financial services brands in the US were considered strong on trust by their customers while 57% were seen as weak.
So what’s happening? Why is trust so weak among financial services firms? Clarke says recent inflation and market volatility has impacted customers’ perceptions of the entire financial sector. But at a broader level, financial services firms simply don’t understand how customer trust is built and lost. Mouhsian says that many brands in this space mistakenly think the factors that satisfy regulators are also the factors that build customer trust. So instead of polling customers about trust, these firms think having a long history, strong regulatory compliance, or more branches make them trustworthy in their customers’ eyes. And if you don’t understand the basic things that drive consumer trust, your efforts to strengthen it won’t be productive.
The implications of these issues can be huge for the financial services industry, which relies on things like personal and private financial data. When trust is strong, financial services brands can reap financial, competitive, and reputational benefits. Customers will follow the brand along its journey, says Clarke. When the brand expands to new markets, develops new offerings, or makes bold business moves, customers have more trust that they’re the right moves. And when trust is weak, those new ideas are a tougher sell.
Later in the episode, the analysts provide some practical next steps for financial services firms that want to begin improving their trust levels with consumers. For starters, try asking your customers what they think of your brand, not just assuming you know what trust is built upon because your firm is 100 years old. And once you have a clearer picture of what factors your customers value, then you can determine which levers to pull to improve those metrics.
Be sure to stick around to hear the analysts discussing some of their 2023 predictions for consumer trust in financial services, including the “dangerous trap” that Mouhsian says some firms may fall into in 2023.