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The way forward to rebuild reputation and trust
Deloitte Trust Index – Banking 2018
29 October 2018: Today Deloitte launches its Australian Trust Index that measures levels of customer trust and general trust influence factors. In this inaugural index - Banking 2018, the professional services firm surveyed banking customers to identify the way forward to rebuild reputation and trust.
“The banking sector has undergone a rigorous and exposing investigation through the Royal Commission into Misconduct in Banking, Superannuation and Financial Services,” said Deloitte Trust Index author Willem Punt. “It highlights the depth of the crisis of trust in the sector in Australia.
“We specifically designed the Index1 to measure levels of customer trust and general trust influence factors so that we could deepen our understanding of the factors influencing trust. This enables us to point to actions banks can take to restore reputation and trust,” he said.
The Index also gives a weighted national benchmark to use to compare individual organisational performance.
The inaugural Banking Trust Index 2018 considers what is most important to the average Australian customer when it comes to trusting their bank and ‘banks in general’.
“The Index indicates the greatest driver of perceptions of trustworthiness among bank customers is a mindset of consistently keeping promises,” said Punt. “Trust improves when it comes to my own bank as opposed to banks in general. For instance 36% of the 2000+ Australian banking customers surveyed believe their bank has their best interests at heart, whereas only 21% believe banks in general have their customers’ best interests at heart. Also 49% trust their own bank to keep its promises compared with 26% in general.
“These results and those of the full index are particularly valuable given that culture and conduct will both get a very hard edge in the strengthened regulatory environment mooted by Commissioner Hayne who has signalled a greater role for the judiciary in ensuring accountability for significant and systemic poor conduct.”
“The way forward to rebuild reputation and trust in today’s business world is far more about communities and relationships and far less about transactions,” said Andy Bateman, Monitor Deloitte Strategy Partner and a key author of the Deloitte Trust Management Model.
Bateman said: “The companies that get this, at the deepest level, are exhibiting the kinds of behaviours that genuinely build trust.”
Punt said: “While there is no indication that consumers do not trust banks to keep their money safe, trustworthiness is expected to play a greater role in shaping consumer choices about where and with whom to bank.
“Being trusted becomes even more critical in an open banking environment where banks will have to contend with the possibility of losing customers to more trusted competitors, as the barriers to exit continue to fall and new entrants join the road to open banking.
“The Deloitte Trust Index on banking gives a clear message as well as cause for optimism. It identifies where to focus and so where the practical ways to recapture trust lie. Banking customers want banks to demonstrate the right mindset by treating them with respect and integrity. This is most important. Only then will the right price, technology and product become significant.”
Download the results and more commentary here
1. The methodology
Deloitte contracted Ipsos to survey 2072 randomly selected demographically representative Australians to answer an online questionnaire. The study meets social scientific reliability benchmarks, with fieldwork completed in August 2018. Respondents provided their views on trust in banking in Australia, both in general, and in relation to their own bank. A multivariate regression of the data created a weighted index to determine which indicators respondents considered more relevant to a key statement: ‘I trust my bank to keep its promises.’ After performing this weighting, the Index declined from 44 to 33. Given that a score below 75 indicates levels of doubt, this means that banks performed poorly in areas that respondents correlate most strongly with the statement: “I trust my bank to keep its promises.”