Lenders will now set the interest rate, but discounts may be offered for the customer's benefit
Brokers who want to make the most of this lending environment need to know where to turn, says non-bank head
- 2018 Commercial Lenders Roundtable
- Top 10 Brokerages 2018
- 2018 Brokers on Aggregators
Deloitte recently launched its inaugural Banking Trust Index 2018 to identify how banks can rebuild reputation and trust with customers.
According to the report’s author, Willem Punt, the royal commission’s rigorous and revealing investigation into the misconduct in banking, superannuation, and financial services highlights the depth of the trust crisis in the sector.
“We specifically designed the Index 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.
According to Punt, “the greatest driver of perceptions of trustworthiness among bank customers is a mindset of consistently keeping promises”.
He added that trust improves with one’s personal bank compared to banks in general. Out of the over 2,000 banking customers surveyed, 36% believe “their bank has their best interest at heart”, while only 21% felt the same with banks in general. The Index also showed that 49% trust their own bank will keep its promises, while only 26% believe the general mass will do so.
“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,” Punt said.
Monitor Deloitte Strategy Partner Andy Bateman said “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. The companies that get this, at the deepest level, are exhibiting the kinds of behaviours that genuinely build trust”.
According to Punt, although there is no indication that consumers don’t trust banks to safe keep their money, “trustworthiness is expected to play a greater role in shaping consumer choices about where and with whom to bank”.
He added that being trusted is even more vital in an open banking environment where banks have to deal with the possibility of losing customers over more trusted competitors, as “the barriers to exit continues to fall” and new entrants join open banking. The Index also gives a reason for optimism, because it identifies where banks should focus their efforts and recapture trust.
“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,” Punt said.
- Is a private mortgage your client's best option?
- How the royal commission could affect lending and regulation