Financial services firms seem to be facing challenges in gaining the trust of their customers, especially in the current climate of inflation and market volatility. According to a Survey, the trust levels appear to be relatively low among customers of financial services brands in 2024. 

For instance, in the United States, approximately one-third of customers reported having high trust in their financial services provider, while just over half expressed low trust in their provider. This indicates a significant gap between the expectations of customers and the perceived trustworthiness of financial institutions, highlighting the need for these firms to reassess their strategies and practices to enhance customer trust and satisfaction during periods of economic uncertainty.

Why Does Customer Trust Matter?

The significance of customer trust cannot be overstated for financial services firms. It serves as a foundational element upon which their operations, growth, and reputation hinge. Strong customer trust yields various benefits, including financial gains, a competitive edge, and a positive reputation, all of which contribute to the expansion and longevity of customer relationships. Conversely, when trust is lacking, firms face significant challenges in attracting and retaining customers, necessitating increased efforts to win business.

Our research underscores the substantial impact of trust on business outcomes, highlighting the consequences when customers base their decisions on the level of trust they have in a company. For instance, disparities in trust levels can profoundly affect customer behavior in several ways:

1. Recommending the brand to family and friends: Among US banking customers, a staggering 93% of those with high trust in their primary bank express willingness to recommend it to others. In stark contrast, only 39% of customers with low trust share the same inclination.
2. Opening another account with the company: Similarly, a significant disparity exists in the likelihood of customers opening another account with their primary bank based on trust levels. A striking 90% of customers with high trust indicate they would open another account, whereas only 34% of those with low trust express the same intention.

These findings underscore the critical importance of cultivating and maintaining trust among customers, as it directly influences their loyalty, advocacy, and willingness to engage in further business with financial services firms.

How Do You Measure Trust?

Understanding trust in the financial services industry is not merely about the longevity or scale of a firm; rather, it involves a nuanced comprehension of what factors influence customer trust and how to quantify it accurately. Despite a company's extensive history or substantial assets, trust remains subjective and contingent on individual perceptions. As a result, self-assessment or reliance on intuition is insufficient for gauging trustworthiness.

To address this challenge, we have developed Forrester's Financial Services Customer Trust Index, a comprehensive methodology designed to evaluate a firm's ability to cultivate customer trust. Drawing upon Forrester's seven key pillars of trust, this index provides financial services brands with invaluable insights and data to assess customer trust levels effectively. By leveraging this framework, brands can gain a deeper understanding of how to build and maintain trust, enabling them to prioritize initiatives that not only enhance trust but also drive revenue growth.

The Key To Earning Customer Trust Is To Understand Your Unique Blueprint

Understanding the intricacies of customer trust in financial services requires recognizing the unique blueprint that exists for each country and firm type. Our research reveals distinct trust-building factors that vary across different regions and sectors. For instance, while dependability ranks highest for trust among US and Canadian banks, empathy emerges as a critical factor as well. Conversely, for US investment firms, dependability takes precedence, followed closely by competence.

This trust blueprint offers invaluable insights for firms to identify opportunities for improvement, such as the empathy gap observed among US and Canadian banks. Surprisingly, a significant percentage of customers in the US (54%) and Canada (50%) feel that their primary bank lacks empathy, a key driver of trust.

By understanding the drivers unique to banking, credit cards, investment, and insurance, firms can gain a deeper understanding of customer perceptions of trust and the factors influencing it. Our findings indicate that firms often underperform on these critical drivers of trust, highlighting significant opportunities for enhancing trust through targeted efforts and improvements.

Trust Is Hard To Earn And Easy To Burn

Building and maintaining trust is a tangible endeavor — it can be cultivated and reinforced. However, earning trust is a challenging task, as it requires consistent efforts to shape customer perceptions and experiences positively over time. Conversely, losing trust can happen swiftly and easily.

To enhance trust, firms need to develop intentional strategies aimed at bolstering customer confidence. The first step involves moving away from guesswork and instead focusing on two crucial aspects: 

1. assessing customers' trust in their brand, and 
2. comprehending the factors driving that trust. 

While data alone cannot provide all the answers, it serves as a valuable tool for identifying opportunities to enhance trust and mitigate actions that may erode it.

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