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%).
“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:
Consumers bought one-third of the banking products sold last year from an institution other than their primary bank. Loyal banking customers own more products, and buy more products… but that doesn’t mean they’re going to make your sales for you.
How exactly does customer loyalty translate into better financial results for a retail bank? And how much value is at stake? For many bankers, the link between loyalty and financial results is somewhat unclear.