Can the banks now walk the talk on trust?
As the Commonwealth Bank CEO Matt Comyn prepares to talk on the theme of being an economic pillar in a time of uncertainty at the AFR Summit on Monday, its seems banks may also be perceived as being most trusted in this time of uncertainty
RFi Group has been tracking customers’ trust in their main financial institution and the trend over the last 2 years.
The findings have culminated into RFI Group’s Banking Trust Index for the Australian market.
Leveraging interviews with more than 63,000 consumers every 12 months, RFi’s Banking Trust Index provides a comprehensive and robust view of how consumer trust has evolved and changed since January 2018.
Since the research was launched, consumer trust in the banks has wavered only once – with a slight dip reported in 2018 between March and December – as the royal commission played out.
For RFi Group chief operating officer Alan Shields, what goes to the heart of a trusted institution is whether a bank is doing the right thing by its customers.
“When we ask consumers what makes them trust an institution, their response is that banks need to consistently demonstrate that they have their customers’ interests at heart.” Shields said.
For example, banks needs to make sure their consumers are always aware that that they have the best product or service available to them.
What was consistent in the RFI group data was that even while the royal commission was ongoing, consumers still trusted banks with their data and managing their money.
While the public inquiry placed intense scrutiny on the sector, which saw the introduction of new legislation and beefed up regulators, the huge impact of COVID-19 on the economy has driven banks to step up and support their customers.
“The challenge for financial institutions has always been that they need to demonstrate that they have their customer interests at heart. In the current environment, they need to do just that.
“Based on what I have seen in the market, I have every confidence that that is what is happening. I am sure that will have an impact on trust.”
To date, the big four as well as the regional and smaller banks have all moved to implement financial support packages to their customers.
It’s a stark contrast to the way banks were perceived pre the royal commission and now amid the COVID-19 challenges.
Indeed, when announcing the Reserve Bank’s $90 billion funding facility, the central bank head Philip Lowe said it was in the interest of the banks to support people during this period adding that banks will play a key role in building a bridge to a better time.
Comyn seems to recognize this challenge and the opportunity to build trust with consumers.
“We have to be judged by our actions and our words, and this is an incredibly important time for the country," he said.
Here Shields sees the bigger banks now perhaps taking the upper hand in consumer trust in a sector that now includes the new digital banks.
“Despite a government guarantee in bank deposits, in a period of uncertainty, I believe consumers will see the larger banks having the necessary protections and will therefore will be willing to trust larger institutions compared to the new entrants.”