David Britton is vice president of industry solutions for global fraud and ID at Experian. Views are the author's own.
The digital environment is anonymous — not by intention, but by its very nature. The last 25 years of transformation have been characterized by an increasing appetite to leverage the digital channel to optimize growth for business, with an increasing desire for security against an equally determined fraudster community. Without security and trust, all the efforts to leverage the channel for businesses or consumer efficiency become an exercise in futility.
Trust should not be taken for granted or assumed. Trust in business is often evident by how willing consumers are to share personal information for some perceived benefit — either security, convenience or personalization. About 60% of consumers globally are aware of the risks involved with giving their personal information to banks and retailers online, according to Experian's 2019 Global Identity and Fraud Report. And more than 70% would provide even more information if there was a perceived benefit. This is why transparency — particularly, showing how consumers' information is used to protect them and create a better overall experience — is paramount in creating this trusted relationship.
Trust in banks
No industry is excelling at establishing digital trust, but consumers believe banks are doing the best amongst the rest. Banks are trusted because of the perception of security. They position themselves so by the way they require people to authenticate and onboard themselves. Consumers tend to trust that banks invest more in security than other industries — which makes sense when you are protecting money. If we trust banks with our money, we are likely to believe they are experts at keeping things secure.
Banks are also trusted because of frequency of engagement. Think about how many times a week you check your bank account, whether it's to pay bills or check your balance. Those frequent check-ins give bank customers a sense of heightened familiarity. People tend to be creatures of habit, and familiarity creates a sense of comfort.
Perception, familiarity and frequency aside, banks can do more to continue to foster trust. Customers demand convenience and security. Banks often do a great job of operating strong security processes, standing up for the customer and handling customer support. But they need to consider other ways to build durable connections with their customers.
If you look at Amazon and Netflix, they create an easy user experience by proving they know who their customers are and what they like. If banks more smartly apply customer data they already have, they can drive recognition, build a deeper relationship and further endear themselves to consumers.
The banking industry, while ahead of other markets, can elevate its trusted position even more by remembering that changing service providers is becoming easier for consumers. That makes it even more critical to develop a relationship with the customer and ensure trust isn't broken. Banks can build better customer relationships by consistently being forthcoming about how personal information is being protected and used.
According to Experian’s recent report, 76% of consumers have greater trust in businesses that give them control over the use of their personal information — how much, with whom it's shared, and a clear understanding of the trade-offs for sharing more (or less). Banks should also have a reliable, feature-rich and secure channel to interact with customers. That will give them a friendlier, more personal touch.
Consumer trust is difficult to gain and easy to lose, so businesses must consider trust in the context of a virtuous cycle — where accurate recognition, transparency, consumer confidence and positive engagement are the driving forces leading to greater trust and a deeper bilateral relationship.