# TRUST AND TRANSPARENCY ARE KEY IF TRADITIONAL BANKS ARE TO RESTORE LOST CONSUMER TRUST Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-07-20 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Why Banks Are Failing to Win Customers' Trust in the UK Meta Description: Discover why traditional banks are failing to meet customer expectations and how reforms are being implemented to improve transparency and service quality. URL: https://financedigest.com/trust-and-transparency-are-key-if-traditional-banks-are-to-restore-lost-consumer-trusthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/marina-cheal-1736843691379-compressed.jpg) By **Marina Cheal**, CMO at [Reevoo](http://www.reevoo.com/) **A YouGov International Omnibus survey published this summer reveals that just 55% of us trust our bank, and only 36% of Brits think traditional banks work in our best interests.** No surprise there, you might think. Some 10 years after the financial crash and despite the arrival of many Fintech disruptors, the high street banks have failed to change enough to completely win back our confidence. Many people remain suspicious, feeling that they are being tricked by carefully worded and complex small print or ripped off by unfair charges. There’s also a view that traditional [banks have been dragged kicking and screaming into the digital age](https://www.financedigest.com/how-fs-organisations-can-enter-the-new-age-in-digital-banking.html "How FS Organisations Can Enter The New Age in Digital Banking"). ![Marina Cheal](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/marina-cheal-300x200-1736843691253-compressed.jpg) Marina Cheal In many of these very old-fashioned institutions, innovation is a [dirty word](https://www.financedigest.com/when-did-discernment-become-a-dirty-word-for-female-entrepreneurs.html "When Did Discernment Become a Dirty Word for Female Entrepreneurs?") – or, at least, an empty one. It’s easy to [blame heavy regulation for a failure](https://www.financedigest.com/snb-defends-raising-rates-says-not-to-blame-for-credit-suisse-failure.html "SNB defends raising rates, says not to blame for Credit Suisse failure") to develop and implement new ideas. Meanwhile, customer service is patchy – whether it’s on the phone, online or in a branch. The Competition and Markets Authority’s (CMA) retail banking marketing investigation [has concluded that banks are fundamentally lazy](https://www.gov.uk/government/news/cma-paves-the-way-for-open-banking-revolution). The CMA says: _“Older and larger [banks do not have to compete hard enough for customers’ business](https://www.financedigest.com/two-speed-economy-in-sweden-central-bank-business-survey-shows.html "Two-speed economy in Sweden, central bank business survey shows"), and smaller and newer banks find it difficult to grow. This means that many people are paying more than they should and are not benefiting from new services.”_ So few of us bother to switch – [despite our levels of dissatisfaction – that there is no incentive for these institutions to work hard to win or retain the consumer](https://www.financedigest.com/uk-consumer-mood-sinks-to-new-depths-despite-energy-bills-help.html "UK consumer mood sinks to new depths despite energy bills help") or business customers they have. In the UK, more than four-fifths of loans to [small businesses](https://www.financedigest.com/reasons-to-obtain-iso-9001-certification-for-small-businesses-in-australia.html "Reasons To Obtain ISO 9001 Certification For Small Businesses In Australia") still come from the biggest four high street lenders: HSBC, Barclays, Lloyds and Royal Bank of Scotland. So, what’s the answer for banks that claim they do want to repair their damaged reputation? The CMA is implementing a [wide-reaching package of reforms](https://www.gov.uk/government/publications/retail-banking-market-investigation-overview) to force banks to find more innovative ways to put the customer first. This includes [sharing data securely through Open Banking](https://www.financedigest.com/asia-shares-edge-higher-wary-of-us-bank-data.html "Asia shares edge higher, wary of US bank data") so people can compare products and services. Open banking began in March and will be widespread by early 2018. [Consumers can view and compare products from rival banks in branches and even on cash machines](https://www.financedigest.com/recent-research-waterjet-cutting-machine-consumables-market-is-expected-to-grow-at-a-cagr-of-4-8-by-2021-to-2031persistence-market-research.html "Recent Research: Waterjet Cutting Machine Consumables Market Is Expected To Grow At A CAGR Of 4.8% By 2021 to 2031:Persistence Market Research"). The CMA also wants [banks to publish](https://www.financedigest.com/bank-of-england-publishes-rules-for-energy-firms-liquidity-tool.html "Bank of England publishes rules for energy firms’ liquidity tool") honest reviews about their customer service – something banks should be doing already through an independent third party. The CMA says it will be: _“Requiring [banks](https://www.financedigest.com/how-to-fulfil-the-digital-transformation-requirement-in-banking.html "How to fulfil the Digital Transformation Requirement in Banking") to publish trustworthy and objective information on quality of service on their websites and in branches, so that customers can see how their own bank shapes up._ _“Whether a personal customer or small business is willing to recommend their [bank to friends](https://www.financedigest.com/the-new-wave-of-consumer-friendly-banking.html "The new wave of consumer-friendly banking"), family and colleagues will be a core measure. but we will also be requiring banks to publish and make available through Open Banking a range of other quality measures.”_ That’s a big one. Banks have a lot of work to do to move the needle. They’re not perceived as transparent and authentic, and only when they demonstrate that they’re listening to their customers will they start to regain trust. What better way to do that than to go public with the voice of the customer? Banks should really be displaying and collecting feedback at all their touchpoints. Their websites, branches and social media channels should be full of testimonials from real customers. The problem, at the moment at least, are that those real customers aren’t happy. But that’s the catch-22. Banks can only get better by absorbing that feedback in the first place. In fact, banks must work harder to engage their customers in all kinds of ways. They should be building on the [personal information they hold so that the products](https://www.financedigest.com/demand-from-personal-care-and-cosmetic-products-will-boost-vegan-wax-market-sales.html "Demand From Personal Care And Cosmetic Products Will Boost Vegan Wax Market Sales") they offer and the services they provide meet our needs more closely. Most customers will happily [share their data](https://www.financedigest.com/u-s-yield-curve-inverts-after-strong-jobs-data-world-shares-mixed.html "U.S. yield curve inverts after strong jobs data; world shares mixed") if they can trust it is being kept safe and it will improve the service they get. Many [banks want to close](https://www.financedigest.com/why-google-is-never-closed-for-maintenance-and-how-banks-can-follow-suit.html "Why Google is never closed for maintenance and how banks can follow suit") branches, but these are great places to interact with and to communicate to customers; and somewhere to massage those long-term relationships that are so often taken for granted. If they’re going to close branches, big banks need to [replace that human](https://www.financedigest.com/human-robotics-will-robots-replace-bankers.html "Human Robotics: Will Robots replace Bankers?") interaction through technology – something they’re being made to look utterly useless at by the quicker, smarter startup banks. Banks must [engage with customers across multiple touch points](https://www.financedigest.com/three-points-to-consider-when-getting-engaged.html "Three Points To Consider When Getting Engaged"). This includes embracing the mobile channel with services such as real-time messaging that informs someone if they are near their overdraft limit, for example. Some [banks already do offer services](https://www.financedigest.com/the-role-of-fintech-in-disrupting-traditional-banking-services.html "The Role of Fintech in Disrupting Traditional Banking Services") like this, but as part of the new regulations, they’ll all have to. Open Banking is a good opportunity to wipe the slate clean, ask customers for forgiveness and put some genuine effort into customer-centricity. Let’s hope the big banks take it. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---