How can the UK banking sector win back consumer trust?

The 2007-08 financial crisis led to a loss in consumer confidence across the banking sector. Nearly a decade on, banks are still struggling to regain customer trust and rebuild their reputations.

Once lost, customer trust can be hard to regain and often costs a huge amount of time and money. So how does the troubled financial sector recover?

Why have people lost trust?

Following the global financial crisis, banks’ struggles have continued with further scandals including the Libor rigging, mis-selling of payment protection insurance and interest rate swaps further undermining public confidence.

The Royal Bank of Scotland (RBS), which is 73% owned by taxpayers, posted a £1bn loss for the first quarter of 2016. The net loss of £968m was higher than the £957m expectation by analysts. In addition, this doubled the £459m loss in the same period last year.

Which banks are bouncing back?

The Co-operative bank almost collapsed less than three years ago. However, consumers still have more trust in this bank than some of the others, according to recent reports from Management Today. The article shows rankings from members of the public against seven measures of reputation. This included quality, management and value as an investment. Here again, RBS lost, with building society Nationwide named as the top rated financial provider.

Cyber-attacks are another huge reason why confidence has been lost, particularly towards the end of last year when Halifax and the Bank of Scotland discovered significant gaps in their security system. These breaches are an increasing issue for companies, particularly in the financial sector. This sector houses large amounts of personal details and sensitive data.

So how does the banking sector recover?

Recovery is not an impossible task. The first step is having an understanding of customers and their needs and reflect this across all areas of business. This includes the products and services offered.

Banks should ensure that they focus on remaining transparent and consistent across their brands and all communications. This encourages consumer trust. All of the first steps to an online reputation recovery should start offline.

Dame Colette Bowe explained to the Telegraph: “A healthy society and a vibrant economy like the UK needs well-run banks and building societies that understand and serve the needs of people and businesses.

“Banks recognise the urgent need to raise their game and build the necessary momentum for change. It won’t happen overnight and it will be an uncomfortable journey but the time has come to win back trust.”

Bowe is leading the new Banking Standards Board, tasked with improving customer trust in the sector. The board will be posting an annual report in the coming months, detailing progress which has been made as it sets standards of good practice across the sector.

Find out how to repair your online reputation following a crisis or find out more about Igniyte’s review management services by contacting Simon Wadsworth on tel: +44 (0) 203 542 8689 or email simon@igniyte.com in confidence.