To anyone who regularly reads the news (or watches “The Daily Show”), it will come as no surprise that Americans’ confidence in banks as an institution is low. Stories of banks’ ineptitude may not be coming out as frequently as they were during the days of TARP, bank failures, bank saving mergers, excessive personal spending by executives, and debit card fee debacles, but the banking industry in general has not done enough to restore its reputation as a whole. Spend 10 minutes perusing any of the more than 23 million links that come up when you Google “banks suck” and it quickly becomes apparent just how much residual ill will there is among the general public toward the banking industry.
I was at the ServiceSource headquarters in San Francisco last week when the afternoon “I need caffeine or I’ll lose it” feeling hit. You know what I’m talking about.
As I found myself wending my way on autopilot towards the closest Starbucks, I stopped for a moment to ponder why I keep on returning to a coffee chain in a city that’s known for having some pretty incredible coffee. As I took my place in a long line of other people feeling that same afternoon slump, it hit me.
According to the new 2014 Trends to Watch report from analyst firm Ovum, consumers will lean most towards mobile payment and digital wallet services associated with financial brands.
This is supported by Ovum’s Consumer Insights Survey, which shows that 43% of respondents chose banks as their most trusted mobile payments service provider, followed by credit card companies (13%), online payment providers (9%), and then mobile operators (6%).
Security is a tricky business, especially as we store more personal information in the cloud, and access it with mobile devices. Passwords only take us so far. Good ones are hard to devise, even harder to remember, and all too easy for hacking software to crack. The few recent high-profile data breaches have given us all a reminder of just how fragile password protection is.
That’s why biometrics—fingerprint, palm and iris scanning, and voice recognition—are looking like the next big thing in keeping our private information private.
“May I have your data?”
”Depends on who’s asking!”
Banks need data from customers to provide them with a differentiated service. They won’t get very far though, until they establish themselves as responsible and trustworthy in customers’ eyes.
Look at banking websites today and you’ll see four common — and deadly — mistakes financial institutions tend to make.
According to the latest Nielsen “Trust in Advertising” report, corporate websites are now the second most trusted form of advertising, second only to “recommendations from people I know.”
This is a wake-up call for the entire financial industry: It’s time for banks and credit unions to get their websites up to snuff.
In December a spat between the German finance minister, Wolfgang Schaeuble, and Deutsche Bank co-chief executive, Juergen Fitschen, cast doubt upon the seriousness with which some banking executives consider the industry’s position.
Schaeuble stated recently that banks are adept at evading rules. Fitschen objected that, while not unworthy of criticism, it is unfair to suggest that banks have not changed their spots since 2008. I am on Schauble’s side and here is why:
Over half of all consumers feel undervalued by their banks. Financial institutions must close the customer experience gap with friendly, knowledgeable staff and banking services that consumers demand.
Almost half of consumers in the US, Great Britain, Germany and France feel their bank does not value them as a customer, according to research from Ipsos MORI commissioned by GMC Software Technology. The research of 4,032 consumers across the four countries looked at what consumers really think about their banks’ customer experience and how they are valued.
Ask most Business Banking executives how they would describe their ideal Relationship Managers (RMs) and you will hear things like “advisers to their clients,” “standout sales performers,” “relationship builders,” and “experts on their clients’ needs.” All these phrases evoke the idea of a partnership built on trust and mutual respect. If this were consistently true, one would speculate that when looking for advice on the day-to-day financial management of their companies, CEOs and financial executives would be turning to their RMs in droves, and they would trust the counsel they are given.
Twenty years ago there were 14,000 FDIC-insured financial institutions. Today that number is cut in half. The reasons are many. And yes, some are beyond our control such as population mobility, technology, and the need for some scale to invest enough to remain relevant. But, as my one-time Division Officer, Lieutenant Proper, once told me: “Be careful pointing your finger, because the other three are pointing at you.”
I recently made a presentation to staffers and advisers to the Pacific Coast Banking School (PCBS) regarding what I would change in the curriculum. My theme was that if we keep teaching bankers the same things, and expect different results (i.e. not cutting our industry by half), then we are insane. I don’t think I’ll be invited back.