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It is
no surprise that consumer trust in banks is low given the current economic
condition and the global financial crisis in 2008. What makes this a cause
for concern at banks is the degree to which a bank's ability to grow deposits
is affected by consumer trust. Consumers that have a high degree of trust in
their bank are twice as likely to open new accounts with their bank as
consumers who only trust their bank somewhat. In fact, consumers who said
they trust their bank "somewhat" were barely more likely to expand
their relationships than consumers who didn't trust their banks at all.
"Banks
have deceived themselves for a long time about the extent to which their
customers trust them," says Ron Shevlin,
senior analyst with Aite Group and co-author of this report. "Consumers
may trust that the US$100 they deposit today will be there tomorrow, but
that's just a tiny element of consumers' trust. Consumer perception of trust
is shaped by the degree to which banks are easy to do business with, the
extent to which they respond quickly to requests and inquiries, and banks'
ability to make their rates and fees clear - all of which banks score poorly
on."
Recent
bank advertising designed to garner consumers' trust are unlikely to pay off,
however. Of the many attributes that influence consumers' level of trust in
their banks, rational attributes (like operational performance, and quality
of advice in sales interactions) were considered more important than
emotional attributes (like having a good reputation and living up to the
values portrayed in ads).
According
to Shevlin, "the key to rebuilding trust lies in improving key business
processes like sales and customer onboarding, and by tracking actual referral
behavior, rather than simply considering customers' intention to refer the
bank."
This
34-page Impact
Report contains 20 figures. Clients of Aite
Group's Retail Banking service can download the report by clicking on the
icon to the right.
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