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The Transparency Crisis in Financial Services

Posted by Alok Chowdhury on May 10, 2016 10:10:19 AM

3 minute read

The Transparency Crisis in Financial Services

Transparency is a powerful thing, especially in traditional industries where it’s common to work behind closed doors. This is especially true in finance where there is a disconnect between the customer and financial institutions such as banks.

Transparency goes beyond the brand story. It also means having the courage to be authentic in front of your customers. So, what makes it so difficult for financial firms to be real in their interactions with their customers?

According to the 2015 and 2016 Edelman Trust Barometer, financial services are at 54%, just above Hydraulic Fracturing companies. According to Edelman, the key attributes in building trust revolve around ethical business practices; perceived openness; listening and engagement with the customer frequently.

We all know what the result of a lack of trust in the financial sector becomes. Investors will be less likely to invest money and individuals less likely to save.

Perhaps some companies want to present themselves as strictly professional; they may not realize how mechanical their brand’s voice is while others don’t want to show any bias that might put off some potential leads. Either way, the plain truth is that humanizing your brand by building trust and transparency is no longer an option; it’s a necessity. The business world is undergoing a revolution; it’s no longer B2B or B2C; it’s now H2H (Human to Human).

At the same study at Edelman, it shows that companies that innovate in a traditional industry can build trust, if done properly. Barclays Bank provides a perfect example of how business is becoming more human, from their drive to be innovative to how they conduct business.

Barclay’s is leading the way in mobile banking in Europe, helping customers use banking services without having to come into the branches. By converting 6500 cashiers from their branches and transforming them into community bankers, with iPads, help their customers use the ATMs. This helps reduce customer wait times in branches and provide a better service.

As companies are increasingly becoming personal, customers desire a higher level of trust and transparency. Empowered customers are looking to have more input into their purchases. They want to be heard and this calls for a new kind of collaboration. Brands now need on-going feedback that will meet their customers’ changing expectations and what better way than through community networks?

Start with social listening.

In general, companies that listen well gain the an advantage over their competitors. Especially when it’s combined with honest two-way conversations. According to the CXFS 2016 Benchmark Report by WBResearch, social media and community platforms should be a higher priority for financial services firms that includes a social strategy where your customers hang out online.

Shoot for Engagement

Banking customers expect more, especially when it comes to their money. They are looking to feel confident that their expectations are met through superior customer service while providing added value. According to the Digital Banking Report - The Power of Personalization , customer service and authenticity is one of the main reasons of opening and closing accounts - more so than the fees or convenience.

Acknowledging problems and solving them in a public way provides a level of authenticity that many financial institutions are not ready to be at.

Social media platforms or forums enable consumers to immediately share their experiences. Those who have a positive experience drive most referrals and are more likely to be loyal. Remember, today’s customer is empowered and isn’t shy in communicating their displeasure when their expectations are not being met. Managing expectations is the key in maintaining strong brand relationships and creating trust.

The empowered customer wants to be involved in every step. Communities are great platforms for social listening and communicating with your clients. Use this to introduce your new products and to ask their opinions on what aspect of your brand should be improved upon. Giving voice to your customers’ thoughts will help build long-lasting relationships.

Topics: Community, News

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