The Australian Bankers’ Association has acknowledged that there is “more work to be done” to improve trust in the banking sector while announcing new industry benchmarks.
Research by Edelman Intelligence for the ABA this week revealed that 31 per cent of respondents had high trust that the banking industry acts to do what is right, while 43 per cent had neutral trust and 27 per cent expressed low trust that banks do what is right.
Those who expressed neutral or low levels of trust most often expressed that they felt that way because they perceive banks to be “driven by profit” (85 per cent), “not focused on customer needs” (52 per cent), “not open or transparent with banking fees and terms” (52 per cent) and “not listening to consumers” (47 per cent).
Anna Bligh, ABA chief executive, said that it is crucial that the banking sector makes real progress in rebuilding trust.
Commenting on the findings, she noted: “The research shows low levels of trust, confidence and transparency in the banking industry with a clear need for improvement.
“Interestingly, survey respondents report stronger levels of trust with their own personal banking experience (53 per cent) than they do with the industry as a whole (31 per cent).
“This points to a real opportunity for banks to translate the experience customers have with their own bank into higher levels of trust in the sector as a whole.”
The research was conducted as part of the ABA’s Banking Reform Program and Better Banking program. The report will serve as an “initial baseline benchmark” against which the industry will measure its progress.
The Banking Reform Program initiatives include reviewing commissions, improving the process for customers when things go wrong, enhancing whistle-blower protections, removing from the industry individuals who acted with poor conduct as well as rogue advisers to bank employees, supporting the Australian Securities and Investments Commission, and reinforcing the ABA’s commitment to customers in the Code of Banking Practice.
Additionally, the ABA wants to make it easier for customers to switch accounts, provide improved support for small businesses and farmers, and support customers in financial hardship.
The report found that respondents scored each initiative between 63 per cent and 75 per cent in terms of importance, and banks working with ASIC (75 per cent) and the industry’s removal of rogue individuals (72 per cent) scored highest.
“It’s a big program of transformation and future benchmarking will look at the full breadth of changes that are underway,” Ms Bligh said.
“Banks are trusted when they’re considered stable, well regulated and reliable. This research shows just how much more work needs to be done before trust in bank culture and conduct reach[es] stronger levels than seen in this research.”