Rebuilding Trust in the Banking and Finance industry
If the Hayne Report issued in response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry made one thing clear, it’s that Australian’s deserve better.
I recently took part in a roundtable discussion facilitated by The IQ Club at ANZ HQ in Docklands, Melbourne talking all things Trust post Hayne Report.
According to the global 2019 Financial Services Consumer Study from consulting giant Accenture, 33 per cent of respondents reported they lost trust in Australian Banks and Financial Institutions in the last 12 months.
Compare that to other countries such as the US, where 13 per cent trust their banks less than they did 12 months ago, Singapore sits at 8%, and China at 5%, it’s clear that the Royal Commission has had a negative impact on consumer sentiment towards the industry.
Whilst it may not have been intentional, a focus on profits and heavy incentivisation on sales performance have created a culture within the Banking and Financial Services industry where selling is all that matters. It has, in part, been able to persist for far too long due to the trust customers place in the Banks and Financial Institution’s to have their best interests at heart.
A Trust which has now been broken.
Trust is fragile, and re-building takes time, effective communication, a commitment to achieving a mutually beneficial outcome and ultimately professional competence. But more than this, rebuilding the public’s trust will require financial institutions to take a look at why they deserve to get it back.
Every interaction needs to be seen as an opportunity to build relationships and nurture trust.
The word ‘trust’ comes with the inherent implication that you are going to look after the trustee’s interests. If you’re asking a customer to trust you, or trust your brand, you aren’t just asking them to buy your product or service, you’re asking them to put their faith in you or your business, and they’re trusting that you’ll reward that faith by looking out for their interests.
The Hayne Report calls not only for a change in current practices within the Banking and Financial Services Industry, but a change in culture. Head of the Royal Commission Kenneth Hayne says while there’s no best practice for creating a more desirable culture, a necessary aspect is adherence to 6 basic norms:
- Obey the law
- Do not mislead or deceive
- Act fairly
- Provide services that are fit for purpose
- Deliver services with reasonable care and skill
- When acting for another, act in the best interest of that other
In my opinion, this last point is the most crucial to rebuilding the trust that the industry has lost. Don’t get me wrong, I’m by no means saying don’t look to make a profit, or don’t incentivise employees to drive those profits, far from it. At the end of the day, financial services are businesses and they’re going to be driven by the bottom line just like anyone else.
What I’m saying is if we want to stand a chance of repairing the relationships with our customers, businesses need to start asking ‘Is this the best thing for my customer?’ before they ask ‘How much am I going to make?’.