Australia’s banking and financial sector has taken a beating lately, as evidenced by new research released by Ernst & Young (EY) that reveals the level of public distrust about banks.
The EY 2016 Global Consumer Banking Survey shows that just 22 per cent of people actually trust their banks to give them unbiased advice. The findings reveal that those surveyed were more likely to trust alternative financial services over traditional banks.
Around 44 per cent of non-bank customers had complete trust in their provider, while only 36 per cent of traditional bank customers felt the same. Only 48 per cent of customers have complete trust in banks to keep their money safe.
"Consumers do broadly trust Australian banks to look after their money securely, however only 20 per cent have complete trust that they will give them unbiased advice that puts their interests first," said EY Banking Customer Leader for Oceania, Rob Colwell. "This is consistent with global trends, where consumers were more likely to trust non-traditional competitors, such as digital-only banks, fintechs and supermarkets offering banking services to provide transparency of fees, unbiased advice, and product recommendations in the best interest of the customer."
Based on these findings, the report suggests the following four ways that banks can regain the confidence of Aussie customers:
- Building customer trust, both in the ability to look after customers’ money and to do the right thing for the customer by providing unbiased, quality advice
- Enhancing customer understanding through learning customer behaviour and needs and creating financial programs to better suit the needs of the individual
- Rethinking distribution and customer engagement by providing better customer service, advice and creating a better ‘customer journey’ across all channels
- Innovating customer experience just as fintechs do, by simplifying products and delivering exceptional customer experiences.
"While Australian banks remain among the most relevant globally, they are facing many challenges, as customers re-evaluate their relationships and a new breed of innovative competitors enter the market," said Mr Colwell.
"In this environment, traditional banks will need to reconsider current practices if they want to maintain relevance with an increasingly disenchanted consumer base. Those that don't adapt, will find their ongoing ability to grow wallet and market share to deliver stable returns to shareholders increasingly at risk."
Do you trust your bank? Where do you seek financial advice?
Read the report summary
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