Trust Tech: The Future of Digital Banking in the UK

matt-brown

Matt Brown

Director of Operations

SYZYGY

A brand without trust is a product. Advertising without trust is noise. Technology without trust is obsolete.
UK Consumers continue to distrust banks. Apple is launching a new kind of credit card designed to repair the trust deficit in financial services. Will it work? And what does it mean for UK banking?
1) Most UK consumers don’t trust banks. A SYZYGY digital insight survey conducted in August 2019 confirms the persistence of a significant trust deficit between UK consumers and their banks. Our research indicates that only 32% of UK consumers believe that banks can be trusted today. 46% say their level of trust in banks has deteriorated over the past three years. Only 7% say the trustworthiness of banks has improved.
2) The economics of trust. In the UK, we found new evidence linking customer trust to business performance in financial services. We observed a strong positive correlation between the degree customers trust their bank and their willingness to recommend that bank. Over half the variation (64%) in propensity to recommend can be explained by the degree that customers trust their bank. To the degree that propensity to recommend (NPS) can be linked to performance, and that overall propensity to recommend rises with increasing trust, then trust appears to be a key component of growth. Additionally, our research indicates that the majority of banking customers (52%) who hold a high level of trust in their bank are ‘Promoters’ who are ready to recommend their bank. We also found that trust is linked to customer loyalty. Customers with a high level of trust in their bank are 32% less likely to switch to another bank after a negative incident. Conversely, 92% of customers with low levels of trust in their bank are ‘Detractors’ who are unlikely to believe that their bank is worth recommending. Low trust customers give their banks an average NPS rating of -89. Overall, our research suggests that building trust could be an effective strategy for UK banks to drive performance.
3) A question of care. UK consumers trust their bank to the degree they believe that their bank genuinely cares about them and is competent to deliver that care. Our research finds a particularly strong correlation between perceptions of caring and trust. Overall, 63% of variation in trust can be explained by the degree that customers perceive their bank as caring and acting in the customer’s best interest. Perceived competence is also linked to trust and explains about one third of variation in trust levels. Together, perceptions of caring and competence account for the overwhelming majority of variation in trust. To rebuild trust, UK banks have the opportunity to reimagine customer care and develop new competencies to deliver it.
4) Trust Tech can repair the trust deficit. Our SYZYGY research suggests a positive future for UK banking based on rebuilding trust. The path to repairing the trust deficit in the UK includes investing in new technology designed to demonstrate genuine care for the financial wellbeing of customers. We call this Trust Tech.
The launch of Apple Card in August 2019 offers UK banking a vision of what Trust Tech might look like in financial services. Built on simplicity, transparency and privacy, Apple Card is designed to work as a trustworthy financial coach, promoting the financial wellbeing of customers with a genuine customer-first value proposition.
Everything about Apple Card appears to be single-mindedly focused on earning customer trust. From features designed to reduce interest payments to a no-fee promise, simple language, familiar interfaces and secure technology, Apple Card is an exercise in trust-building.
“Trust Tech is technology designed to foster trust by facilitating the financial wellbeing of customers”
The new opportunity for banks is to take inspiration from Apple Card and invest in Trust Tech designed to foster trust by facilitating the financial wellbeing of customers.
The future of digital banking is Trust Tech.
To download the full report, please click the button in the top right of this page for a PDF version.

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