JOHANNESBURG; Feb. 01, 2021 – Impersonal digital bank transactions via online and mobile channels have accelerated during the COVID-19 pandemic, causing a deeper ongoing erosion of consumer trust in banks. This is according to a new report by Accenture (NYSE: ACN). Banks must earn consumer trust if they hope to provide lucrative advisory services as a cornerstone of their growth strategies.
"Our latest Accenture 2020 Global Banking Consumer Study, based on a survey of more than 47,000 consumers globally, reveals that without a strong emotional connection with their bank, customers are more likely to view banking services as a commodity, with price being the ultimate competitive differentiator," states Jigyasa Singh, Technology Managing Director for Accenture in Africa. "We found that 37% of consumers ranked value for money as a top three factor, making it the most important factor when dealing with a bank, an increase of 10% from two years ago," she adds.
While banks have long been encouraging consumers to use digital channels for transactional banking activity, it was difficult to predict how aggressively that trend would accelerate as a result of COVID-19. According to the study, banks often view broader digital adoption as a way to lower costs and provide services 24/7, the rapid pivot to existing and hastily launched digital services has all but removed the vital human element from banking, further eroding consumer trust.
"At a time when customer trust is critically important, the recent shift to digital is threatening the relationships banks have worked to develop," said Singh. "The pandemic-inspired increase in digital engagement is a double-edged sword for banks. While it has allowed them to serve customers efficiently throughout the pandemic – and advanced their digital strategies by up to five years in some cases – it has pushed them to launch solutions that are functionally adequate but devoid of emotion. To forge strong customer connections, banks must reimagine the digital services they provide and make those connections more personal and relevant."
When asked how much they trust their bank to look after their data, fewer than four in 10 (37%) said "a lot," a 14 percentage-point drop from just two years ago. Yet while overall trust might be eroding, the report found that more than half (57%) of consumers believe that when providing advice, their bank has their best interest in mind "always" or "most of the time," and 62% believe that the advice is smart, personalised and well-informed.
These factors likely contribute to why nearly one-quarter (23%) of consumers believe that banks are in the best position to provide them with products and services outside of their core areas of expertise, compared with only 16%, 12%, and 11% of respondents who said the same for tech providers, social media companies and neobanks, respectively.