illustration indicating barriers to building trust in financial services

3 Barriers to Building Trust in Financial Services

The financial industry is facing a crisis of consumer trust. Simultaneously, the potential for disruption from outside sources is at an all-time high. To compete in a digital world, financial institutions will need to design along a trust-building framework, despite common barriers to successful innovation.
Toshi Mogi

The financial industry is facing a crisis of consumer trust. Simultaneously, the potential for disruption from outside sources is at an all-time high. To compete in a digital world, financial institutions will need to design along a trust-building framework, despite common barriers to successful innovation.

Consumers have proven they are willing to explore alternative options for their personal finances, making the financial services landscape more competitive than ever. Yet, forging new ground requires allowing for consumer trust at each step of the design, development and delivery process. Designing trustworthy, secure and reliable financial products is the best, most sustainable way of helping customers accept newer, more innovation solutions.

At frog, we help our clients design products and services that instill trust and inspire loyalty. That’s why we’ve created what we call the trust-building framework based on four core pillars specifically for the financial industry: competency, reliability, empathy and customer orientation. With this in mind, here are three common barriers to designing for that trust.

1Inconsistent Reputations

‘Transformation’ may be a buzz word in the digital world, but it’s important for customers to feel secure enough to buy in to innovation business models, services and even new currencies. To do this, having a consistent reputation for navigating current offerings while bringing customers along to new options is key. This is equally difficult for both new startups, brand new to the marketplace, and established legacy institutions looking to launch new products, services, departments or even entirely new companies. Building up a reputation for deep financial expertise and reliable, consistent customer experiences is essential for engaging new and established customers in exploring new options.

2Transactional Mindsets

Personal finances are about more than collecting dollars and cents; they’re about enabling important life events, such as buying property or getting married. Knowing this, it’s hard to get customers to trust businesses that don’t seem to express empathy for their needs, motivations and financial situations. Instead of having a transactional mindset, which is one that prioritizes the exchange of goods over all, organizations looking to break new ground in the financial industry should adopt a more relationship-based mindset. An empathetic, human-centered approach leads to more personalized offerings that are better tailored to customer’s actual life experiences.

3Conflicting Interests

It’s no secret that financial industry leaders, FinTech companies and others outside of the traditional landscape are bringing exponentially new business models, new economies and entirely new ways of thinking about personal and institutional wealth. Yet, this means there are just as many ways for businesses to lose that customer orientation and risk consumer trust. Avoiding conflicting interests is essential. For instance, if a company were to leverage revenue streams that incentivized unhealthy spending habits at the detriment of a customer’s financial well-being, this would be a clear conflict of interest. In order for customers to be on board, they’ll need to know that organizations have their best interest in mind.

To find out more about how the four pillars of trust can improve customer relationships and help develop lasting trust, download the Designing for Digital Trust Insight Report.

For more on Designing for Trust in the Digital Age, download the full report here Designing for Digital Trust Insight
To find out more about how the four pillars of trust can improve customer relationships and help develop lasting trust, download the Designing for Digital Trust Insight Report.
Read the full report
Author
Toshi Mogi
Toshi Mogi
Toshi Mogi

As AVP of Innovation Strategy at frog, Dr. Toshiharu (Toshi) Mogi leads the Financial Services Practice. With over 20 years of experience, Toshi leads frog engagement teams to incorporate design thinking, emerging technologies, market disruptions, and entrepreneurial methods to help clients identify opportunities, develop competitive growth strategies, and create new innovative products and experiences.