I hate banks. They do nothing positive for anybody except take care of themselves. They’re first in with their fees and first out when there’s trouble. – Earl Warren

Former Supreme Court Justice Earl Warren is not alone in his assessment of banks as self-centered organizations. It’s a common sentiment. Two out of every three consumers believe that “all banks really care about are their own interests,” according to cg42’s 2015 Brand Vulnerability Study of 3,000 retail customers—a troubling metric that has grown worst since 2011.

Another metric, the Edelman Trust Barometer, which annually assesses attitudes about the state of trust across 27 countries, tells much the same story. Since 2008, the only industry ranking lower than finance and banking—and just by a hair—is the media.

It seems incredible that an industry built on holding and protecting such a crucial asset could grow with trust ratings in the basement.

Consumer trust and confidence levels eroded significantly following the 2008 financial collapse, when the role of the megabanks was revealed. Although Dodd-Frank and tougher federal regulations were intended to instill confidence in the banking system, it didn’t seem to move the trust needle. Armies of new compliance officers didn’t seem to help either. JP Morgan, for instance, reportedly hired an additional 13,000 people in the area of compliance since 2012.

So here are two questions we should ponder:

  • How can we increase consumer trust in banking?
  • How would elevated trust in banks affect consumer behavior and profitability?

The first is easier to answer.

Researchers have found that perceived trustworthiness includes three elements: ability, integrity and benevolence. That translates to asking three questions of ourselves. Are we competent? Are we honest? Do we care about others?

We probably register pretty well on competency, and maybe honesty, but not on benevolence. Consumers have made clear that we only care about ourselves.

Although we advertise the right qualities—individual attention, helpful advice, community commitment—the customer isn’t believing it. Almost half perceive that one bank is as good as another. The cg42 study shows that 41-46% of respondents over the last three years see little difference between banks. Millennials are even more cynical. In that demographic, 53% think all banks are the same, according to the 2015 Millennial Disruption Index.

Madan Pillutla, a professor at the London Business School, used game play to better understand how trust is built. He concluded that firms must demonstrate early on that they are on the side of the customer if they are to enjoy long-term, trust-building relationships.

Clients must feel benevolence in a real and tangible way, which means demonstrating you have their interest top of mind. This may mean recommending an action that is beneficial only to the customer, such as recommending the least expensive checking account or holding off on a new loan until they pay off a high-rate credit card.

To engender trust, customers must see that benevolence underlies a bank’s actions and behaviors. This requires bank management to eschew a short-term sales culture for a longer-term vision that views relationship-building as central to the long-term interest of the bank. It also requires that bankers connect with a client on a personal level. Unfortunately, digital banking drives customers away from personal interactions, which makes regaining trust even harder.

What about the other question, on how enhanced trust in banks would affect performance and profitability? It’s tough to predict. But if you’re in the game for the long haul, a long-term strategy beats short-term successes any day.

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