The Restoring Trust in Financial Services in the Digital Era report, published by Deloitte Digital and Salesforce and involving a survey of 1,005 Australians, has revealed that 32 per cent of respondents said that their trust in the financial services industry has declined in the past 12 months.
The fall in trust was largely driven by distrust in the banking sector.
When asked to assess their trust in the banks, 42 per cent of respondents said that it had either “deteriorated slightly” or “deteriorated significantly” over the past 12 months.
Only 29 per cent of respondents deemed banks to be trustworthy.
Deloitte Digital partner Brad Milliken said: “It isn’t sufficient for financial services firms to simply talk about trust; they must actively diagnose, improve and manage for better outcomes. This survey clearly demonstrates the appetite to use emerging technology to do this.
“Our research shows that an organisation’s trustworthiness is impacted by three pillars: ethical intent, capabilities and an alignment to customer interests. And that having ethical intent is not sufficient if the organisation can’t deliver on the promises it makes. They need the right people, systems and processes, and our survey identifies systems to protect customer’s data and privacy as key.”
Willingness to share data
The report also noted the open banking initiative proposed by the federal government through the Comprehensive Credit Reporting (CCR) regime, with respondents asked to consider whether they would be willing to share personal information.
The research found that 29 per cent of respondents were less willing to share personal and financial information now compared to six months ago.
Further, 20 per cent of respondents said that they believe the financial services industry fails to meet most, or only meets some, expectations.
However, 58 per cent of Australians noted that they would be willing to share data with their financial services provider to access higher-quality products.
Customers open to alternative fintech providers
The survey also found that customers would consider personal financial management fintechs (38 per cent) and banking fintechs (34 per cent) as alternative service providers.
However, only 18 per cent of bank customers said that they were either “quite likely” or “highly likely” to switch to an alternative provider in the next one to two years.
Regional vice president at Salesforce John Moran added: “Pressure on the financial services industry to improve the customer experience and rebuild trust continues to grow.
“Millennials in particular are showing that, with the breakdown in trust, customers are looking to alternative providers for financial advice and services.
“Customer relationship management technology has never been more important to the industry with the need to rebuild relationships and deliver the level of transparency and customer experience expected today.
“Building deeper and more personal relationships with customers will separate successful companies in financial services from the crowd.”
The findings follow on from similar sentiments revealed in Roy Morgan’s Advocacy Report – Financial Institutions June 2018, which surveyed 4,000 bank customers and found that borrowers were now less likely to recommend their bank to a friend or colleague.