Financial services firms like yours work hard to earn and keep the trust of your customers. But consumer trust isn’t just the product of your customer service and marketing efforts. It fluctuates with the times. And in times of crisis — including financial downturns, political instability, and the like — consumer trust in financial services institutions almost always goes down. Remarkably, 2020 was a radically different story. In the midst of a global pandemic, historic job losses, and an uncertain political climate, consumer trust in financial services firms shot up to an all-time high.
While that’s certainly an achievement worth celebrating, now is not the best time to become complacent. History reveals that large spikes in consumer trust are notoriously hard to hang onto. In fact, when financial services firms experience a double-digit gain one year, the next year serves up a loss a whopping 76% of the time, according to Edelman’s 2020 Trust Barometer report for the Financial Services sector.
Consumer trust in the financial services sector in the era of COVID-19
As reported by Edelman, consumer trust in the financial services sector reached an all-time high as of May 2020. In addition, the Edelman report found that:
10 out of 11 markets saw an increase in consumer trust in financial services during the first two months of the pandemic. (Banks are the leaders here. People have less trust in insurance.)
Financial services employees rank second highest among nine industries surveyed in how involved they want their employers to be in helping those who are suffering or risking their lives because of the pandemic (67% of respondents).
Financial services employees report the highest level of employer trust (84%).
Even more striking evidence can be found in EPAM’s survey of more than 4,500 consumers across four major markets, including the United States. In it, they found that the vast majority of consumers worldwide (82%) are happy with their bank — and nearly half (46%) describe themselves as “extremely happy.” This represents especially good news for traditional institutions: The number of respondents who reported relying on challenger brands was in the single digits.
These exceptionally high satisfaction ratings are clearly tied to trust. In fact, nearly two-thirds (63%) of respondents cited trust as the main reason for deciding where to place their primary bank account. That’s especially striking when you consider that the EPAM survey took place in June and July of 2020, in the thick of pandemic-related quarantines, job losses, and industry shut-downs.
Why did consumer trust in financial services go up?
So, what’s the story behind these compelling numbers? Why is it that consumer trust bucked the usual downward spiral in the midst of a crisis (in this case, a global pandemic with stunning economic consequences)?
The simplest answer may lie in financial services institutions’ response. Consumers expect companies to respond to crises and help solve problems — and in this case, financial services organizations mobilized quickly and stepped up to the plate. By offering relief-oriented solutions (such as mortgage deferral programs for those negatively impacted by the pandemic), they proved to their customers that they had their backs.
Underlying that response are a number of secondary factors. For example, over the past several years, the financial services industry has shifted to a more tech-enabled model. This has put them in a position to offer better, more cost-effective products and respond more flexibly to a crisis like this one.
Finally, the government’s stimulus packages have made some of the industry’s more altruistic-looking efforts (like those mortgage relief programs) possible. All of these factors add up to an unprecedented spike in consumer trust.
How to leverage consumer trust in the financial services sector into long-lasting brand equity
No doubt, in 2021 many institutions will focus on services innovation and educating their consumers about them. They’ll also continue to provide information on the best ways for consumers to do business with them as the pandemic continues and recovery hopefully begins. To preserve and ideally build on the goodwill and trust the industry is now enjoying, forward-thinking financial services executives also need to ensure the brand is represented across visual and verbal brand elements. This consistency is essential to conveying steadfastness and reliability, qualities which serve as trust badges for financial services customers.
Those organizations with optimized brand and marketing operations are in the best position to deliver consistent communications and experiences that reflect their brand strategy. These efforts—the optimization of brand and marketing operations—involve examining the processes, resources, tools, and training used to manage the portfolio of branded assets and day-to-day marketing operations with the goal of identifying gaps and bringing best practices into use. BrandActive helps financial services marketers identify those gaps, then partners with them to create and implement sustainable improvements. Organizations are then able to create consistent impressions in a seamless manner.
To sum this up, research indicates today’s high levels of consumer trust in their financial institutions is the rare silver lining to the terrible cloud brought on by the pandemic. The rapid, stellar response of the industry to consumer needs during this time—combined with ongoing strategic moves by financial services organizations to offer better, more flexible consumer products and experiences—get credit for this shift. Focusing on aligning your brand and marketing operations to bring consistency to your communications across all channels will put you in the best position to retain and expand upon these consumer trust dividends in 2021 and beyond.