Petra Smith, Managing Director of Squirrels&Bears, explores what underpins trust in financial services and how to win it.
There are few other industries where trust is as critical as it is in financial services.
Whether it’s managing investments, providing insurance coverage, or offering banking services, trust is a critical element in choosing a financial services provider, both in B2B and B2C marketing.
When it comes to money, we are acutely aware of risks. Trust in financial services is built on the perception of risk associated with the services offered as clients look for reassurance that their finances are in capable hands, mitigating the perceived risks of loss or lack of return on investment. This perception is bolstered by perceived expertise and authority and it increases with a proven track record and client satisfaction.
Understanding the psychology of trust
At its core, trust is the belief that a person or entity will act in the best interest of another. In psychology, trust is often seen as a key component of social relationships, influencing interactions and perceptions. In marketing, trust is an ongoing process built on a few key building blocks:
Reliability: Clients need to believe that you will consistently deliver on your promises. This assurance is formed through consistency in your marketing communication and customer experience.
Competence: To gain trust, you must prove your ability to effectively meet the needs and expectations your clients. Demonstrating expertise, providing quality products and services, and showcasing your happy clients are all effective ways to do so.
Integrity: People look for honesty and transparency in businesses. Integrity involves ethical practices, honesty in advertising, and transparent communication, especially during crises or when mistakes are made.
But trust in marketing is not just a rational concept – it involves emotional components too. Whilst cognitive trust is based on the logical evaluation of business attributes, such as reliability, competence, and integrity, emotional trust stems from feelings and experiences with your brand.
Cognitive trust is built through information, facts, and logical assessment. Effective use of data, customer testimonials, and transparent business practices can all help in building cognitive trust. Good examples are elements such as detailed product information or customer reviews. On the other hand, emotional trust is cultivated through personal connections and positive experiences. Marketing strategies that engage customers on a personal level, such as personalised communication, empathy in customer service, and community-building initiatives, are crucial, as brands that generate positive emotions and align with their clients’ values and beliefs create stronger emotional bonds.
Translating trust into your marketing strategy
Content Marketing
High-quality content that educates, informs, and provides value helps establish authority and trust. Thought leadership articles, how-to guides, and insightful blogs position a brand as a reliable source of information. However, effective content marketing goes beyond information – its success depends on engaging the audience and it goes beyond grabbing attention to maintaining it and prompting meaningful interactions.
What makes content even more impactful is personalisation. Personalisation taps into several core psychological needs and behaviours, as people have a fundamental desire to be recognised as individuals with unique preferences and identities. Personalised marketing acknowledges this need by tailoring messages, offers, and experiences to individuals, making them feel valued and understood.
The human brain is wired to filter out irrelevant information, and personalised content cuts through the noise by providing information that is directly relevant to the recipient’s interests and needs, capturing and holding their attention more effectively. As personalised content is easier for the brain to process because it aligns with the recipient’s existing knowledge, preferences, and behaviours, this cognitive ease makes personalised marketing more engaging and less mentally taxing, increasing the likelihood of positive responses.
Social Proof
Leveraging customer testimonials, reviews, and case studies can significantly boost trust as it provides evidence of your reliability and effectiveness through the experiences of others. Humans have a natural tendency to conform to the behaviours and opinions of others, especially in uncertain situations. When individuals see others engaging in a particular behaviour or endorsing a brand, they are more likely to follow suit, believing that these actions are correct or beneficial.
Seeing positive reviews and testimonials can also reduce the perceived risk associated with a purchase or commitment, making your clients feel more confident that they are making the right decision when others have had positive experiences. As a result, social proof can lead to higher conversion rates, as we are more likely to act when we see that others have done it successfully. What’s more, testimonials and user-generated content create an emotional connection as personal stories and experiences resonate with us on a deeper level, fostering loyalty and engagement.
We are more influenced by people who are like us in terms of demographics, interests, or life situations. Testimonials and reviews from peers or people with similar backgrounds can be therefore particularly effective. We are also more likely to value something that is perceived as limited or rare and social proof can enhance this perception of scarcity by highlighting the popularity or high demand for a product.
Social media
Building trust through social media marketing is an ongoing process that requires consistency, transparency, and genuine engagement with the online community. By leveraging user-generated content, maintaining a unified brand voice, providing valuable content, and showing empathy, you can cultivate a strong, trust-based relationship with your audience.
Going beyond informative content and sharing insights about your business operations, product development, and decision-making processes creates transparency that helps to make your brand more relatable. Use real stories from your employees, clients, and the community as authentic content resonates more with social media audiences and fosters a deeper connection. It also prompts your clients to share their experiences and feature these testimonials on your social media platforms.
Highlighting user-generated content not only provides authenticity but also shows appreciation for your community. Social media marketing is a two-way street – respond to comments, messages, and mentions promptly, as active engagement shows that you value your audience and are attentive to their needs and it helps the algorithm to notice your content. Include polls, Q&A sessions, and live videos to interact with your audience in real-time to build a sense of community and make customers feel involved and valued.
Trust is the foundation of any successful business relationship. It influences consumer behaviour, loyalty, and advocacy. When clients trust a brand, they are more likely to make a purchase, recommend the brand to others, and forgive occasional mistakes. On the other hand, a lack of trust can lead to losing clients and damaging your reputation.
In the digital age, where consumers are bombarded with information and options, trust is a vital currency in financial services; and establishing and maintaining trust with your audience can be the deciding factor between a loyal client base and a fleeting one.
