How to Make Sure Consumers Can Trust Your Financial Institution
Banks have to deal with a wide range of risks — profitability, credit, market, liquidity, and fraud are just a small sampling of the risk landscape. Banks also have to deal with lack-of-confidence risks. Addressing this nebulous and often unquantifiable risk can be tricky, but it’s critical if you want your financial institution to be successful.
Consumers have more choices than ever before. They can whip their phones out of their pockets and find a long list of banks and fintech companies that can offer them every financial product they want or need. In the past, they rode the ups and downs with a single bank because they didn’t have any other options. Now, they can take a piecemeal approach to their finances using a variety of entities.
In this climate, you need to work harder than ever to attract and retain customers. That involves offering the right mix of products and services, but it also entails building trust in your financial services. Inspiring trust and confidence is just as important as addressing any other risk. Arguably, it’s even more important because, without customers, you don’t have a business.
1. Commitment to cybersecurity
You hold a lot of personal information about your customers, more than businesses in nearly any other sector, and you need to earn this right. People are increasingly leary about sharing their information because they know the risks.
Even if a victim of identity theft doesn’t incur any direct losses, they have to deal with frozen credit reports and the threat of someone opening accounts with their details for years after the incident. To protect your customers and earn their trust, your bank needs a strong commitment to cybersecurity.
Your customers may not care about the exact firewall or cybersecurity measures you use. But they do care about your history of security. If your financial institution falls prey to hacking or data breaches, the incident will affect your reputation and increase your lack-of-confidence risk. To safeguard your reputation, you need to invest in and prioritize cybersecurity.
2. Real-time anti-fraud detection and prevention
While some thieves may go after large swathes of data, others focus on a more narrow target — individual customers and accounts. Fraud is rampant in the financial services industry, and it’s not going anywhere. Instead, fraud artists are constantly evolving their techniques to keep pace with changes in the banking world.
The innovation of criminals can be astounding, but if fraud happens on your watch, your customers won’t be impressed by the criminal’s innovation. Instead, they’ll be devastated by the losses, and in most cases, they will blame you.
Consumers expect their banks to protect them from fraud. Even when they help facilitate fraud by falling prey to a phishing attack or unwittingly agreeing to become a mule, they still often blame their financial institutions. To earn and maintain the confidence of your customers, you need proactive anti-fraud solutions.
You need tools and solutions that can detect fraud as it’s happening, but even more critically, you need the ability to preempt fraud before it occurs. Anti-fraud solutions driven by artificial intelligence and machine learning get to know your customers’ patterns. Working in real-time, they look for aberrations that signal an increased risk of fraud, and when they see a red flag, they prevent the transaction from moving forward or present it for manual review.
3. Strong disaster mitigation strategy
Unfortunately, in spite of your best efforts, cyber breaches, fraud, and other disasters will occur. They will impair consumer confidence in your organization. But the right response can mitigate the reputational effects of a cyber breach or a fraudulent act.
While addressing confidence risks, you need to create plans to protect your assets and your customers, but you also need to plot out a response to disasters. How will you stop the data breach while still maintaining access to databases for critical business functions? How will you stop fraud without impairing your customer’s ability to use their account? How will you notify your customers? You need to reach them before the media does.
If losses occur, what steps will you take to make your customers whole? For instance, if their data has been breached, will you provide them with identity theft protection services? Help them freeze their credit? Do you have a dedicated customer service line for customers to report fraud? Is your process easy to navigate? Or does it create roadblocks for customers? These are the types of questions to consider as you create your post-disaster mitigation strategy.
4. Trust-inspiring human interactions
Technology can provide protection and convenience in a way that humans absolutely can’t do on their own. Your employees may know a few telltale signs of a forged signature, but they can’t discern minute distinctions like software can. To close the confidence gap, technology is essential, but your human team is still the face of your bank.
Your customers rely on technology to augment and streamline banking processes, but they also want a personal touch. When they’re engaging with tellers, personal bankers, customer service phone reps, or loan officers, they want to feel like they can trust these people.
To inspire confidence in your customers, your employees need to be well-spoken and well-trained. They need to be able to handle questions and concerns intelligently and kindly. They also need to be accessible.
When creating telephone trees or routing chatbot conversations to real people, you need a streamlined process that is easy to navigate. You want your customers to know that they can easily reach a real person as needed and desired. They’ll lose confidence in your operations if they can only interact with AI and robots.
5. Personalized customers journeys
The personalization of the customer journey is not just a marketing imperative. It’s an essential component of a strong customer-bank relationship. Your financial institution needs to use AI and machine learning to personalize offerings and recommendations. But beyond selling services, you need to provide personalized and relevant guidance.
A high-quality banking experience adds value to a customer’s life. It helps them become better stewards of their resources and shows them how to optimize their financial potential. When customers receive value through personalization, they feel cared for — and that builds trust. People are inherently more likely to trust entities who have their back.
6. Frictionless customer experiences
The day-to-day interactions your customers have with your bank unequivocally affect their confidence levels in your bank. They should feel like you’re a strong and capable partner in their life and their finances. If they doubt your ability to keep their assets safe while also facilitating their financial movements, they will lose faith in you.
Friction can destroy confidence in your bank. You need a frictionless customer experience across all products and services. Customers need to be able to apply for loans or open new accounts easily. They need to transfer funds between accounts seamlessly. And they need to be able to use their account without false-positive fraud flags gumming up the process.
A frictionless experience relies on technology. Whether you’re building apps or installing anti-fraud tools, you need to work with technology partners who can create intuitive seamless services for your customers. But at the same time, you also need to ensure that your technology partners have an in-depth understanding of the banking industry’s regulations and the unique security needs of its customers.
7. Radical transparency
Transparency builds trust. Stay away from misleading messages in your marketing campaigns. Be upfront about fees, policies, terms, and conditions. When customers can see that you have nothing to hide, they will become more trusting, and your financial institution will shrink the confidence gap.
You should be confident about your financial institution. You should feel proud about the products and services you offer your clients. And you should have a plan in place to inspire confidence in your customers and the community. With the right approach, your financial institution can address the lack-of-confidence risk, and we can help.
At SQN Banking Systems, we provide fraud prevention and detection tools and services including image fraud analysis, signature verification, transaction fraud analysis, official check verification, mobile signature capture, safe deposit management, and conversion services.
We provide fraud protection that you and your customers can trust. To learn more, contact us today.