Maintaining Customer Trust in Digital Banking Era

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Oddly enough, while customers often entrust their life savings to financial providers, only 43% of them believe that banks care about customers’ long-term financial well-being, found Accenture. In our increasingly digitized reality, trust becomes a critical factor in fostering customer loyalty.

With pandemics forcing customers to rely on digital channels, there is even more pressure on banks to convince customers they can be trusted to perform much wider and more complicated financial transactions.

Conventionally, for example, the majority of loan applications could only be managed at physical branches – but now there is an increasing demand for doing it online. This is why we see an increasing demand for mobile banking app development and cloud-based solutions.

While the digitization of services is inevitable, it also has some negative consequences. By moving from offline to online, many banks struggle to maintain an emotional connection with their customers. As a result, relationships weaken, making it increasingly hard for banks to position themselves as institutions that customers can trust, especially in times of crisis.

Building emotional trust

Banks were meant to perform an important social function, which becomes somewhat forgotten largely due to the rapid pace of technological advancements. According to the previously mentioned Accenture report, when people have to deal with serious financial difficulties, only 28% of them turn to a bank for financial advice.

In this context, turning the tide comes down to ensuring that communication with a human advisor appears as a significant event. It’s critical for first-line bank employees to focus on establishing an emotional connection with the customers. These workers should transform from being a third-party link between a customer and a service – into a service itself.

Another way to build more meaningful connections with the customers is to become proactive in helping them. Instead of waiting for customers to ask for advice, banks can offer advice based on the data they have. By providing a highly personalized service offering or even a piece of free financial advice, financial providers can move an inch further on their way to re-establishing trust.

Preventing fraud

Compared to last year, all types of banking scams have grown in almost every part of the world. This shouldn’t be surprising, as pandemic-induced anxiety and an overall increase in digital transactions opened up many opportunities for the wrongdoers.

Due to this, customers’ trust in banks significantly decreased. To address this issue, banks need to revisit their security protocols and ensure that transactions’ risks correlate with security robustness.

For example, if a customer needs to check their balance, device recognition, along with an eight-digit password, would be adequate means of protection. However, if it’s a new account opening or a big payment, facial or voice recognition or behavioral biometrics should be applied. This will make cybercriminals’ jobs much harder and show customers that security is taken seriously.

Other than that, there is still a considerable number of customers that willingly hand their data to fraudsters. This is why fraud education is critical – especially when it comes to the elderly. Sending emails with basic warnings is not sufficient. These rules need to be told in person or by phone, and their importance needs to be emphasized. Again, this will not only decrease fraud probability but also help customers to feel taken care of.

Ensuring transparency

In banking, transparency can come in many shapes and forms. For example, clearly stating how long a particular transaction is going to take and actually keeping this promise can be highly valuable for an average customer. Proving to be reliable in the context of these seemingly little details can go a long way.

What is more – transparent, clearly written and straightforward terms and conditions without excessive law jargon can also boost customer trust. In fact, the 20th Annual Edelman Trust Barometer revealed that easily understood terms and conditions is the most important factor in increasing customer trust in financial services.

Apart from being a hard test of adaptability, our challenging times are also a perfect opportunity for banks to prove their integrity and transparency. Building trust in a digital world may sound complicated at first, but in reality, it takes the same principles that banks applied in their physical branches.

For example, previously it took first-line employees to explain terms and conditions in person in a friendly manner. Nowadays, a clearly written terms and conditions document should be easily accessed online, accompanied by a chatbot able to explain the peculiarities to customers on demand.

The bottom line

Banks need to prioritize consumer trust and figure out how they can build more meaningful relationships with their customers. Every transaction and customer touchpoint should be considered as an opportunity to gain trust.

Andrey Koptelov is an innovation analyst at Itransition: Software Development Company, headquartered in Denver. With a profound experience in IT, he writes about new disruptive technologies and innovations.

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