It’s no surprise that many financial institutions are grappling with customer retention and acquisition strategies. And it should come as even less of a surprise that one driving factor for many customers is trust. Banks and credit unions must understand customer needs regarding trust and develop strategies for improving trust levels to foster business growth. Thankfully, there are many ways you can accomplish this goal and strengthen your position as a financial provider.

Navigating challenges with trust in financial institutions

Building trust also empowers your institution to understand your customers, creating a positive cycle of making changes, accepting feedback, and improving the customer experience. However, there are several challenges that can impede an institution's ability to appear trustworthy.

The top challenges of navigating trust in banking include:

Customer Expectations

First and foremost, financial institutions must understand their customers' expectations regarding reliability and transparency. Taking the initiative to put your customers first can highlight your commitment to them and help create more meaningful relationships. If your customers don't feel like you understand them or care about their needs, they'll likely seek competitors. Whether your institution lacks the tools customers want, provides a poor mobile or digital experience, or has confined communication channels, there are likely many ways you can improve the customer experience.

Business reputation

A lack of trust can negatively impact financial institutions. Many people rely on word-of-mouth recommendations from friends and family to make purchasing and banking decisions. If your institution maintains a positive, trustworthy reputation, people may be more likely to recommend your services.

More than 30% of consumers
do not trust financial institutions
to act ethically and honestly

Historical data

Recent studies have highlighted the changes in bank and customer relationships. One study highlights that customer trust has fallen significantly due to factors like poor customer service, bad press, or unexpected fees. Another poll showcases that more than 30% of consumers do not trust financial institutions to act ethically and honestly. Whether attitudes are changing due to historical bank scandals, poor firsthand experiences, or a lack of modern tools and technologies, the fact is that financial institutions must gain trust back.

The most important factors of financial trust

Building customer trust involves leveraging industry best practices, adhering to customer needs, and fostering a sustainable culture that empowers future growth and adaptation. Consider these crucial elements for establishing financial trust and what your institution can do to stand out from competitors.

01
Building transparency and communication

Creating a culture of transparency and communication involves acting in your customers' best interests. Financial institutions should share information regarding decision-making, policies, operations, and similar pertinent information customers would want to know. Communicating this information and making it easy to access can dispel doubts new and existing customers may have. Actions like publishing audits, showcasing compliance, and providing explanations of complex concepts or changes can make your customers feel more comfortable and empower them to make informed decisions.

02
Ensuring security and privacy

In our digital world, privacy and security are at the forefront of many people's minds. When it comes to financial information, it is even more crucial to have peace of mind regarding these elements. Customers trust their financial institutions to protect their information and funds and expect robust practices for preventing fraud and unauthorized account access.

Financial institutions should employ data protection strategies and craft comprehensive privacy policies outlining how they use information, why they collect data, and what the institution does to ensure financial solution reliability.

Beyond listening to your customers’
needs and wants, it's important to utilize a
customer-centric approach.

03
Using a customer centric approach

Beyond listening to your customers' needs and wants, it's important to utilize a customer-centric approach. Personalized experiences, customer services, responsive support, and intuitive and easy-to-use platforms make for a much more enjoyable customer experience. Technologies and tools like cloud computing, machine learning, and artificial intelligence make it possible to implement large batches of personalization efforts.

You can use elements like nudges, insights, and recommendations to help customers:

• Stay informed
• Manage their finances effectively
• Build meaningful relationships

04
Building long-term relationships

The shift toward building trust is an ongoing effort. Customers do not want short-term changes — they want long-lasting solutions that adapt as your business and their needs grow.

Consistency in reliable service is crucial. Strategies like implementing loyalty programs and offering milestone rewards can encourage customers to remain at your institution. Community involvement and financial planning can help show customers your long-term commitment and strengthen your position in local landscapes. These initiatives can also help boost brand reputations, offering several benefits at once.

05
Following ethical practices

Another significant element that impacts trust levels is your institution's ability and commitment to adhere to ethical practices. Factors like hidden costs and a lack of fee transparency can create feelings of uncertainty among customers. Your customers should always understand why your institution does something and how it will impact them. Additionally, in some cases, charging hidden fees can be illegal and cause an institution to face penalties from local, state, or federal governments that can severely tarnish its reputation.

Leveraging technology to enhance trust in banking

Innovative technologies offer unique opportunities to enhance trust when your institution leverages them the right way. Here's how you can implement technology solutions:

Highlight digital solutions: An institution's online presence can quickly shape customer experiences and opinions. In our ever-evolving digital age, a strong online presence is a necessity. Offering digital solutions such as a user-friendly website or mobile app adds convenience and empowers customers to connect with your institution in whatever way is most meaningful to them. You can also use these solutions to offer product or service details, provide customer support, and post educational resources to further exemplify transparency.

Offer free demos: Free demos are an excellent way for your institution to highlight your offerings and introduce potential customers to your services at no obligation. This strategy allows customers to understand your capabilities, ask questions, and get a feel for your brand and operations. Free demos can help reduce perceived risks, build confidence in your business, and create a meaningful first interaction between your institution and a new customer.

Stay innovative and adaptable: Technologies will continue evolving, and financial institutions must be able to keep up with the trends. Customers will continue seeking convenience, and new technologies often bring faster or more efficient ways to accomplish tasks. If an institution falls behind, it's more likely that customers will move to other, more adaptive organizations.

Why choose Array to help boost trust

At Array, our mission is to fuel financial progress. We're more than a product suite — we're an empowering platform that helps your account holders protect their identity, own their financial future, and maintain privacy in one convenient location. We work with industry-leading organizations to drive growth and make implementation as easy as possible.

We've helped leading organizations accomplish their goals, and we're ready to help you do the same. With capabilities to deepen customer relationships, build loyalty with empowering tools, and keep customers coming back, you can trust us to support your institution and help you grow.

Fuel financial progress with Array

Understanding the importance of trust in banking is the first step toward developing customer-centric approaches for enhancing trust. With Array, banks and credit unions can find solutions for creating meaningful engagement and identifying new revenue streams. Our solutions can help you remain competitive, drive user engagement, and align your strategic goals.

Get started with Array by requesting a demo. We look forward to serving you. .

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Editorial Note: This content is the author’s opinion, expression, and/or recommendation(s).