By Paul McAdam

Customers are frustrated with their banks.

While over 70 percent of retail banking customers are satisfied with their banks, only 23 percent believe that banks are meeting the expectations that are essential for forming relevant, trusted relationships.

This is a key finding of the FIS Consumer Banking PACE Index, which is based on a survey of 9,000 consumers. The index was created to track how banking providers are performing against 18 customer expectations in nine countries: the United States, the United Kingdom, Brazil, Canada, France, Germany, India, the Netherlands and Thailand.

According to consumers worldwide, banking providers excel at meeting customers’ needs for convenience, choice and access — the requirements of a “commodity” relationship. However, 77 percent of customers say banks aren’t meeting the expectations that are crucial for creating trusted relationships and becoming partners in reaching financial goals. These expectations include:

  • Safety — protecting customers’ money
  • Security — protecting customers’ personal information
  • Fairness — not having hidden charges or fees
  • Reliability — following through on promises
  • Transparency — providing easy-to-understand pricing and terms

It makes sense. How can a customer develop trust if these basic requirements aren’t met? This is a universal truth that’s clearly critical in our industry, where people are entrusting us to keep their savings secure.

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How should we respond to these results? Before decorating the house, we have to fix its foundation.

Banks must meet the basic expectations in order to engage customers in ways that foster long-term relationships. Otherwise, banks become vulnerable to being pushed out by competitors that provide — or are perceived as providing — greater transparency, fairness and reliability.

Lack of trust is a major obstacle to building deeper relationships, even when banks succeed at retaining customers on basic commodity services such as transaction accounts.

Banks know that the global financial crisis had a negative impact on consumer trust. Likewise, they know that new digital entrants don’t have the same regulatory constraints as banks, such as the heavier communication requirements regarding account terms and conditions. And, of course, some customers incur fees that cause them to label their banks as “unfair,” when those fees are actually caused by customers’ mistakes, poor money management skills or lack of attention to detail.

All of these issues are realities in the banking industry today, and they’ll be realities in the future. And customers’ expectations related to fairness, reliability and transparency won’t get lower. In order for banking providers to truly satisfy their customers, they’ll need to look beyond what’s standard today and examine new customer-centric ways to overcome these challenges.

More focus on simplifying customer communication is required immediately. But a lasting solution calls for studying the key aspects of building trust throughout the customer journey — such as account opening and applying for a loan or credit — to identify where trust breaks down. In many cases, transformation must occur in order to respond effectively and make fair adjustments to pricing, product configurations and service levels when customers’ expectations change.

Which basic customer expectations are you working toward meeting more effectively? What’s your biggest challenge in making those improvements?

For a more in depth conversation, please join us in our session at the Innovation Conference, Monday, October 5th at 1pm.

Paul McAdam is a senior vice president of strategic thought leadership at FIS, the world’s largest provider dedicated to banking and payment technologies. Paul leads a team within FIS’ global marketing and corporation communications group, which conducts primary research on critical industry issues.