If you think this is a problem caused entirely by the recent collapse of the world’s financial system, you’d be wrong. The problem goes back much further. Research in the mid 90s – during a period of strong economic growth – showed up to 85% of all bank customers said they did not trust their banks. Among the major banks, only First Direct scored well for trust, and they were spectacularly better than all others.
The remedy proposed by many banks at the time was better marketing. The proposition they wanted to get out there was, in so many words, “Trust us”. They honestly believed that by saying this, it would magically happen. To show why this could never work, I once played a group of bankers the scene from Disney’s “Jungle Book” in which the song “Trust in me” is sung by a large python to its potential lunch. They got the point. Trust can only be given, not claimed.
Therefore, marketing can’t fix the problem all on its own. In fact, marketing is part of the problem. It does not enjoy a stainless reputation – especially as practised by the banks. I was once asked to help launch a gold credit card that was neither the first, nor the best in terms of rates, rewards or any other measure. For want of any supporting evidence to prove its superiority, my agency was asked to use what are horribly known as “aspirational pictures” and boastful headlines containing no claims that could be challenged. Anyone in direct marketing or advertising who has worked with almost any bank will find this brief wearily familiar: “It’s not the best rate, it’s not the best deal, it’s a bit better than some, but nowhere near the market leader. Now sell it.”
So how, given the years of bad practice and now the exposure of so many banks as profligate risk-takers, do they begin to restore trust?
The answer does not lie in marketing, or in banking. It lies in understanding how trust grows between human beings.
Who do you trust? Probably very few people on first meeting. Trust takes time to grow. If someone listens to you, and shows that they have, it helps – although not if they parrot back at you so much personal information you think they’re turning into a stalker.
Banks know both too much and too little about their customers. They know all our financial details, in depth, but these tell almost nothing about who we really are. Nor are these details learnt from listening, but more likely from figures on a screen. Listening is different and takes effort.
My own bank manager (Lloyds TSB, Cirencester, to give credit where it’s due) recently gave me her work mobile phone number. In one simple action, she hugely increased my trust in her. I’ve only used the number once, and when I did she was on the school run, but took the call anyway and not only did all I asked, but also took the time to have a proper human conversation. About children.
I imagine many bankers would tremble at the thought of handing out their mobile numbers. But look at it from the customers’ point of view. You, dear bank, have my phone numbers, my address, and pretty much all my money. I, on the other hand, have the number of a call centre. Or I did, until my bank manager put herself on an equal footing with me.
Another good foundation for trust is empathy. If you show me that you understand what it is like to be me, I am more likely to trust you. Bankers need to make an effort in this respect. I remember running a seminar for a group of about twenty bankers in which we were supposed to re-engineer the way they sold pensions, savings and investments. About an hour into it, it struck me that they had no idea what it was like to be a customer. I asked if any of them had ever bought any of these kind of products for themselves. Complete blank. Not one ever had. They had all got these products through their work. No one had stood on the other side of the counter, called the call centre, visited the website, or filled in and posted the form.
Getting their financial services through their jobs did come with a fairly heavy downside. Imagine if your boss had sight of your credit card statements, and gave you a telling-off if you ever failed to pay off the monthly balance.
The point is, bankers rarely know what it’s actually like to be a customer. Would it hurt to give it a try every now and then? Or even regularly? Just to see what it’s like. It would lead to quite a lot of changes, I suspect, all of which might help inspire trust.
Finally, honesty. Clearly this is essential for trust. It’s also clearly what’s gone wrong. Who knows what the bankers were up to with our money? Very few of us. Not because we’re stupid, but because to most of us, banking is excruciatingly boring. Hugh Grant tells a funny story about his mother, seated next to a banker at a dinner party, who asked her about her children. She replied that she had one son who was a banker, and another who was a film star. “How exciting!” came the reply. “Which bank?”
Only a complete banker would think that way. Now recently, banking stopped being boring and became frightening instead. This is not better. When it stops being frightening, it cannot return to being boring. If it does, we’ll never find out what banks actually do with our money, and we won’t trust them. And it’s up to the banks to fix this. When you meet a boring person at a party, do you blame yourself for their dullness? No, it’s their problem. Likewise, banks must find ways to make us interested in what they’re up to, other than scaring the pants off us.
And they mustn’t tell us it’s all so complicated we can’t be made to understand. What we’ve actually learnt recently is that it’s all so complicated that the bankers themselves don’t seem to understand it. That’s the most frightening part.
In the spirit of honesty, then, it would be a good idea for banks to tell customers, in language we can all understand, what they do with our money.
And if it turns out they don’t know, or can’t explain it, they’d better find a way to use our money that we can all understand. Including bankers themselves.