Consumer trust is crucial for banks to undergo successful digital transformation

In an era rife with conspiracy theories fuelled by the pandemic, trust in government and large organisations has become more fragile. It’s an issue which is ever so delicate for the financial services (FS) sector. And because interactions are increasingly digitally-led, the custodians of personal data are having a precarious time.

Digital transformation is rapidly changing the ways businesses operate, and FS institutions must now meet customers anywhere, at any time, and on any device. However, access to data to innovate is essential for this to happen.

As emerging technologies revolutionise both banking and other financial verticals, data will be the catalyst that drives traditional firms forward while enabling them to keep pace with their digital-native competitors.

But whilst this is essential for the industry, are FS customers ready for the trade off? Because 60% of UK consumers say they don’t trust their banks to protect their data, according to new NetApp’s research. Let’s explore why the success of digital transformation is interwoven with consumer trust.

A human touch

It’s not news that humans are social beings. So it comes as little surprise to learn banking customers prefer in-person interaction when looking for opinion based, advisory support such as mortgages. 71% state they would prefer to speak to a real person, rather than an AI-based chatbot, and almost half (46%) still prefer to go into a bank’s branch to access these services.

Moreover, more than half (67%) say they’re afraid their personal data may be stolen by criminals if they use third party providers.

If these sentiments persist, they’ll undoubtedly slow down the evolution of the sector and as such, the ability to grow and compete at pace.

Digital-first everything

On the other hand, there’s been a huge lifestyle shift since the pandemic began. Most people desire convenient services and have adapted to online-first methods, from shopping to virtual counselling.

The picture is no different in the FS sector, as a majority (72%) of customers prefer to access services from their bank’s website and 60% from the app when carrying out more transactional requirements, such as paying online, setting up direct debits and checking account balances.

It’s clear the desire for virtual banking is there. So banks need to bridge the gap between innovation and digital transformation with trust.

A case of trust

Convenience and trust must go hand-in-hand, yet this remains an issue for the sector.

Many UK consumers still feel held back from the convenience of online banking with almost half (48%) saying if they knew more about the safety of online banking, they would start to use it, or use it more often.

However, in a similar survey carried out last year, 80% of UK consumers said they trust their banks to protect their money, but only 66% feel the same with their data. Fast forward to this present survey, and not much has changed as 60% of customers still believe their personal data isn’t safe.

In an industry where human interaction is clearly still crucial and trust is of the utmost importance, digital transformation is proving a challenge.

Perhaps it’s time for FS leaders to focus on building trust by ensuring customer data remains safe and secure.