Rebuilding The Trust

Felix Thomson

Content Executive

The Financial Services Forum

Customers continue to lose trust in the financial services industry. Philip Williamson argues that companies are sending the wrong messages, and need to change their mind-sets.
One of the key challenges facing the industry at the moment is the question of how to address falling consumer trust in financial services providers. Why is it that people are instantly “turned off” from doing business with us? We should, whatever specific part of the industry we are in, be providing high quality service, making our customers better off, and protecting them against an uncertain future. Why are we not more popular?
Simply put, I believe there is an increasing lack of trust in financial services companies. It seems pretty clear from the general tenor of articles in the consumer press and the broadcast media that journalists regard most financial services companies with less trust and more suspicion. Customers, too, seem to take much less for granted these days, and are increasingly-aware of their “rights”. The Financial Ombudsman Service (FOS) is handling more and more complaints, and scandals such as Equitable Life and endowments mis-selling have shaken confidence in the industry. Some of this is, perhaps, not completely within our control. Falling equity values from 2000 to 2003 lost many of our customers a lot of money and severely tested their faith in banks, building societies and insurers, even though there was little that we could have done to buck the market trend.
However, we should not look for excuses, even justifiable ones. We are, to a large extent, the authors of this lack of trust. Too often, we are perceived as offering poor value, poor service and unclear information.
When it comes to value, for example, customers see that many current account providers – in truth the majority of the market – still offer only 0.1% interest on balances. How can this be justified when the best providers are offering nearer to 5%?1 They see similar disparities on overdrafts, credit cards, savings, mortgages – in fact, right across the product range. Customers must suspect that, if it is possible for some providers to offer market-leading rates, those who are so far out-of-line are simply making excessive profits.
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