The latest Edelman Trust Barometer data on financial services reveals that 41 percent of consumers choose to use the products and services of financial services companies they trust, and nearly a third will also recommend those products and services to others.
The power of trust can’t be overstated in the financial services sector, but brands and organizations are increasingly operating in a world of distrust. A five-year rise in overall trust in financial services has stalled, and the steepest drop is in the U.S., where informed public trust fell 20 points from last year.
What does this decline mean for the sector and where do financial services companies and organizations go from here?
Katie Spring, general manager of Financial Communications at Edelman Chicago, hosted a panel of industry experts to unpack the importance of trust. The panel discussion was moderated by Matt Heimer, features editor at Fortune, and included speakers from various corners of the financial services industry:
These industry leaders discussed five key themes that are dominating conversation and shaping decisions in financial services today:
Changes in government policy and regulation also have raised awareness and concern among consumers, leading to more questions and higher expectations, Singer of COUNTRY Financial added. With customers getting increasingly more educated on the complexities of the industry, financial services companies need to be able to support and encourage clients’ demand for clear and accurate answers.
2. Data and Security: Data is a top concern for financial services companies today, especially given the new awareness and concern among consumers as a result of the cyberattacks and data-mining scandals that have occurred over the past 12 months. According to Singer, 2018 is “the year of security,” and compliance should be top priority for the industry. Provisioning new employees is a key action item for firms this year, too, added Giuliano of Nuveen. To ensure employees fully understand data protocol, financial services companies must offer trainings and learning opportunities that discuss security and regulation requirements.
3. Communication Tools and Channels: According to Moffat, gone are the days when there were only one or two options for advertising. The media market is fragmented, and to reach the consumer, brands need to leverage new tools and channels to distribute and amplify their message. These channels should also be used as data points to help companies define how consumers prefer to interact with brands, Giuliano noted.
Companies should be more inquisitive about how customers want to communicate and then personalize their approach based on that information. It’s critical that brands meet customers where they are and use technology to enable more efficient communication, Moffat added, both to build stronger client relationships and avoid wasted spend.
4. Improved Regulation: New regulation standards have changed the way financial services companies do business and are helping the industry as a whole be more transparent, said Giuliano, which is ultimately better for the end investor. But consumer disclosures can have all the transparency in the world and still not be understood, so the onus is on financial services companies to offer boot camps, trainings and learning opportunities for customers to better educate them about various products, services and how to use them.
5. Activism and Values: Financial services companies are conservative by nature, said Singer – after all, investors don’t want companies to take big risks with their money. When it comes to speaking out on public issues, authenticity is key. Singer noted that the response needs to be genuine, and truly depends on the personality of the company and CEO.
It’s also important to question whether taking a stance is relevant, according to Moffat, who feels company CEOs don’t always need to comment on hotly contested debates. What’s more important is living and operating around a core set of company values that focus on helping the disadvantaged – an idea everyone can get behind.
Allison Dorr is a senior account executive, Financial Communications, Chicago.
Karolina Kmiecik is an account executive, Financial Communications, Chicago