For banks today, trust has become the centrepiece for building and fostering sustainable relationships with customers. Its importance cannot be underestimated; everyone knows trust can take a long time to build and can disappear in just the blink of an eye.
In the current banking environment, for customers to access almost any product and service, they are required to hand over unique and personal data, from names, ages, addresses, passport numbers, phone numbers to next of kin and even their biometrics.
Without trust, customers will be reluctant to provide this information and banks risk losing their loyalty long-term.
The era of the customer has arrived, and the time has finally come where banking customers can benefit from greater visibility and transparency between financial service institutions through new Open Banking frameworks.
So, do citizens trust banks?
Unisys data consistently shows that customers are more likely to trust an organisation and share their personal data if they have been told, or know, how it will be used1.
In fact, concerns about security and trust are often cited as the main reasons that consumers do not use digital channels to their fullest potential.
For the first time ever, the Unisys APAC Banking Insights survey, asked bank customers which type of organisations they trusted the most with their personal data.
Consumers in New Zealand (41%) and the Philippines (42%) trust banks more than any other type of organisation including, the Government, Telcos and card networks.
In comparison, just 16% Australians, 20% of Hong Kongers and 19% in Taiwan trust banks most with their personal data. In fact, in these countries, citizens would rather trust “no-one” than anyone when it comes to sharing their personal information.
The findings are a timely reminder that building and maintaining trust is increasingly difficult for an industry which is a consistently a high-level target for sophisticated and persistent security threats.
What’s at stake?
When it comes to the loss of personal information, there’s more at stake than just the data and financial assets. Reputational loss and disruption to the customer experience can be equally, if not more, damaging for banks. Banks can also be subject to substantial fines and other penalties.
Financial service institutions need to behave like they’re already under attack. Taking a ’zero trust’ approach to security offers banks the best opportunity to safeguard assets from unforeseen breaches.
How to win and retain trust
Open Banking frameworks, regulations or guidelines have been introduced across the financial services industry globally in a bid to give customers more control of their banking data.
Through Open Banking, customers not only have greater transparency and control of their data, but also have increased convenience; particularly those looking to switch banks, and possibly even get a better deal out of it.
There has been growing momentum for the use of Open Banking by customers across Asia Pacific, and banks should be cautious that if they don’t join this ecosystem, they risk losing loyalty and favour with customers.
Banks also face competition from nimble FinTech’s and other non-bank players, as well as from other banks who choose to make Open Banking differentiators for them.
Open Banking presents a huge opportunity for banks to drive innovation and competition; however, many still view it as compliance and regulatory burden.
Supporting this type of framework will position banks as champions for the protection of personal information and provide a platform for financial service institutions to proactively and publicly talk about data protection and the strong security and consent models they will have in place.
Trust is a precious commodity in today’s world of financial services. As threats continue to evolve, banks who want to secure their position as a trusted partner, and bank of choice must ensure they have the most effective tools and solutions in place to mitigate risk. For more insights on how to achieve this, read the 2019 Unisys APAC Banking Insights report available here.