How Can Banks Use Technology to Improve Consumer Trust

Customers of banks and financial institutions widely believe that their chosen service provider does not have their interests at heart. 28% of surveyed customers said as much in a report from The Financial Brand. An even higher share, 33%, said that they don’t think banks understand their financial needs. This does not help to boost trust in the banking sector.

To illustrate – this is like hiring a dog walker to walk your dogs – except you don’t think they understand your dog’s needs. Why, then, would you trust them with Captain Snuggles? Consumer trust in banks is a lot like this and helps illustrate exactly why is trust important in the banking system.

Think about the last time you applied for a loan and how much information you provided your bank in order to get it approved. Customers are happy to share and let you use their information, as long as this helps improve their customer experience. And if you’re a bank, you’re sitting on a goldmine of customer information that your clients want you to use to improve their experience. (Just remember to follow data compliance regulations on your markets.)

Creating personalized experiences for your clients using the information they provide is easy when you connect with them over the channels they prefer. Doing this will help you show your clients that you understand their needs – which helps you build trust as a result.

Before you can unlock the full potential of this data, however, there are two things you need to specifically consider:

Owning a CRM populated with customer information is just the first step. This valuable information needs to be synched with your messaging platform, so that you can consistently engage with your customers in a way that is contextually relevant to them.

Think of it this way: if you’re having a serious conversation with someone but you need to keep on repeating important points, then you won’t have the feeling that the other person is paying attention to you. And that can be very frustrating.

Your clients feel that exact same way whenever they switch between communication channels with you – from email to phone calls to everything in between. If your channels aren’t all synched, then you risk frustrating your clients when they have to repeat important points. You can, however, avoid this – so why wouldn’t you?

In addition to making sure your channels are synched, it’s equally important to make sure your internal structure is synched as well. Data siloes occur when you have multiple departments and channels operating independently. This is an obvious obstacle towards being able to provide the sort of seamless, cross-channel contextual conversations that show your clients you’re listening.

Let’s start by first answering the question “what is personalization in banking”. This should help explain:

This is easily the best definition of personalization in banking. The “right channel” is the channel, or channels, that clients prefer to communicate over. To determine this, it’s important to constantly track and test which channels provide the highest level of engagement with each client. This helps you know which channel is the right one.

The “right channel” also means “the right channel for the job” – and knowing which is a bit different. Think about chatbots. How can chatbots help with banking personalization? They can help reduce the load on client service agents by handling simpler requests, like account balance information.

On the other hand, there are more complex services that require a human touch – like opening a new account or applying for a loan. A chatbot can easily handle the personal service information, while introducing a human agent where needed.

When building trust, banks cannot neglect the importance of that personal touch. Right now, the tendency is to design digital interactions that appeal more to clients’ reasoning than their emotions – which is something industry influencer Jim Marous points out in a report from the Temkin Group. 

So, how can banks build trust with personalization? By designing compelling conversations and delivering them to clients in real-time over the right channels. And keep in mind while designing these conversations that you already have the data to make them personal, and contextually relevant across all channels.

Personalization is only one part of building the sort of relationships that grow into trust. Backing that up with a sense of security is where things begin to really take off.

On-demand services, like the often-mentioned FANG (Facebook, Amazon, Netflix and Google), have sped up the pace at which people expect services to be delivered. And it can be challenging for banks to respond to that demand, while also keeping everyone secure. So, how can banks use technology to boost personalization – and keep clients secure – in order to build trust?

One idea is to learn from fintech. Financial technology companies’ core business is providing quick financial services built around convenience and security. This gives them a level of agility that traditional banks simply won’t have the resources to support – which is fine.

This way, banks can leave the development of these technologies to the companies whose business it is to get them off the ground, and then swoop in to adopt them – without having to build them out for themselves.

But it doesn’t have to be space-age technology. In fact, there is a technology that is decades old that banks are coming around to using to speed up PIN delivery. Secure PIN delivery over SMS helps banks avoid the risks involved with traditional methods of delivering credit and debit card PINs to clients. By delivering over a quick, responsive channel, banks can independently manage and improve PIN delivery and card activation rates.

A major US bank faced a drop in new account openings after it was revealed that the bank had opened over 2 million customer deposit and credit card accounts without customers’ permission. The bank’s response? Launch an ad campaign to boost consumer trust in banks.

The impact? Stocks dropped 10% in the period coinciding with the campaign – and took 9 months to bounce back. That, and this campaign did not help to fix the lack of trust in financial services.

That’s a cautionary tale. Trust needs to be built through actions, not just words.

These are just a few ideas that can help banks use technology to build trust in banking experiences. For more insights, fill out the form below and download our eBook: Better Banking Through Better Communications.