Public trust in key institutions has nosedived; the future will belong to whoever is able to rebuild it.
According to the 2021 Edelman Trust Barometer, a survey of more than 33,000 respondents in 28 countries, public trust in key institutions has nosedived and needs to be rebuilt. So, what role do banks have to play in this process?
As a child I would visit my local bank with my piggybank, trusting the staff to empty it, count it accurately, and keep me posted on all my future earnings. I still do — except that the bank doesn’t accept my piggybank anymore; they expect me to count all the money before I set foot in the branch office, and the interest rate has placed my piggybank on an eternal diet.
But if banks shouldn’t be on top of the trust barometer, who should? In today’s world, that “trust space” is up for grabs and in the future, it will belong to whoever is willing to build that trust.
Here’s the issue: lost trust is nearly impossible to regain. Banks, however, haven’t actually lost trust in the eyes of the public; they just haven’t maintained it. And as tech giants such as Facebook, Amazon and Apple have steadily lost the public’s trust, a giant question mark has been painted across almost every other institution.
The Portuguese–American neuroscientist Antonio Damasio argued that our brains create ‘somatic markers’ — positive and negative emotional bookmarks. The events of September 11, 2001, for example, would belong to the negative category. Your experience of that day was so profound that even now, 20 years later, you remember where you were when you heard the news, and who you phoned first. By contrast, I bet you can’t recall what you had for dinner at your last birthday party.
According to neuroscience, it takes a positive somatic marker to override a negative one. Banking is no exception. So, what does it take for banking to establish a somatic marker? One thing is for sure: a bank won’t establish a positive somatic marker by creating more forms, or adding triple-verification passwords and multiple security check questions. And it certainly won’t create a positive somatic marker by closing your bank account because of a $1.21 overdraft (as happened to me), or by making it almost impossible to reach a live person on the phone in your hour of need.
Michele Obama once said: “When they go low, we go high.” With that in mind, I’d say this: as fintech and big tech moves into banking, trying to displace the incumbents, banks should respond by going high. I’m aware that the days are long gone when every bank customer — from a little boy with a piggybank on up — could expect to be friends with all the staff at the bank, but perhaps it’s worth reconsidering the concept of banking services.
As fintech and big tech moves into banking, trying to displace the incumbents, banks should respond by going high
A few years ago, a major magazine asked me to advise them on how to tackle the rise of digitalisation. Many rival publications sought to compete against the online threat by cutting pages, using cheaper paper and reducing print quality. I managed to convince the magazine’s management to go in the opposite direction. During a period when other magazines were discounting themselves out of business, this particular publication upgraded its print edition and today is one of the few print magazines still thriving. The experience highlights that consumer demand for a high-quality experience was robust enough to justify a higher price point in exchange for a superior product.
Banking is no exception, but their path to building trust isn’t only through bits-and-bytes — it’s through people. Studies on trust demonstrate that, at the end of the day, what people really trust is people. They want personal relationships even more than sleek interface designs. It is important to keep that in mind while rebuilding trust in banking.
This transition cannot be done overnight. It requires a long-term plan. But there’s never been a better time to make the effort.
Why not offer banking products at a higher price in return for the re-introduction of personal relationships? Call it “personal banking for the masses” — for those willing to pay a bit extra. You’ll be surprised how many people will be eager to go for it. Many people have experienced a closed bank account, with no one available to fix the issue until Monday. Most of us would be more than willing to pay a little bit extra for the peace-of-mind that comes from knowing we’ll get quality advice when we need it most urgently.
Don’t get me wrong, this shouldn’t be another opportunity to make a profit. I see it as a break-even service, creating relationships little-by-little, combatting the discounting trend that is ripping the heart out of personal banking. It won’t happen as a consequence of technology creating the underlying security framework in every bank — but on top of it. Let’s reintroduce common sense, which often seems missing from the world of tech. We’ll do it through the eyes and voices of people.
Remember: trust is not a matter of technique, tricks, tools, or software — but of character. That character has left banking. It’s time to invite it back in.
Martin Lindstrom is an author and founder of Lindstrom Company, a business transformation group.
