Overcoming Privacy Inertia in Financial Services Means Innovating for Trust

/ 8 April 2021

By Mike Giambattista, Publisher, TheCustomer

Is it any wonder that Financial Services organizations are experiencing exaggerated consumer sentiment swings? The combined effects of COVID-related anxiety and consumers’ naturally protective nature when it comes to their finances are creating something of a perfect “mis-trust” storm and driving a need for customer data practices that foster trust.

Look at the popularity trendlines of phrases like “brand authenticity”, “brand transparency”, and “brand trust” and you’ll see that these inter-related notions have become top-of-mind criteria for consumers looking to make decisions as to who (and who not-to) do business with.

“Verified trust has become the connective tissue between brands and consumer sentiment. In 2020 expectations for trust in financial institutions nearly doubled from a year prior and this year have increased another 60%, making expectations for trust in the financial sector third most-highest, just behind social networking and technology!”
Robert Passikoff, CEO of Brand Keys

The term “zero-party data” is in vogue right now as something of a panacea for customer data acquisition but the reality is it’s simply a name for yet another type of data and doesn’t, in and of itself, speak to any material effect on the power or efficacy of that data.  On the other hand, permissioned data speaks to the nature of the relationship.

“Please, not another survey!”

After trying (and failing) to engage customers and employees with new initiatives, a major financial services company*, with a significant retail presence, opted to try something a little more down-to-earth, that is to say, a little more “human”.  Even though they had a relatively sophisticated CRM and segmentation practice, the mechanics of their messaging – indeed, all of their customer-facing operations, were very much rooted in dated, “batch & blast” approaches that had been declining in effectiveness and eroding brand loyalty for years.

The financial services company implemented a series of gamified mechanics designed to meet customers at the thresholds of what the organization already understood about them. By presenting them with simple requests to help create better, healthier relationships, the organization was able to create bonds with those customers that proved to be orders of magnitude more engaging, fiscally rich and longer lasting than any other previous initiative.  Central to that effort was the idea that permissioned data capture – one where both parties were aware-of, and consented-to the gather and use of information – would hopefully enrich the relationship.

* The organization has asked to remain anonymous but has provided the resultant data.

There’s nothing wrong with asking for permission.

Let’s look at this dilemma from a consumer stand-point.  You’re likely aware that companies are gathering data about you.  You may have some idea of how much.  You probably have less of an idea how that data is actually used and who has access to it.  But, like most people, as long as the transaction works, as long as nothing egregious happens in the process, those data capture practices are simply the cost of doing business.  It’s something that we have all become used to as the “way things are done.”

What’s less obvious, however, is that as a consumer your expectations (product & service expectations, privacy expectations, etc.) are constantly rising.  Research pegs that number at around 22% annually, across the board.  Meanwhile, brands’ abilities to meet those always-increasing expectations are only rising at about 7% across the board.  The simple math shows a growing gap between what you expect as a customer and what you’re getting from the brand.

Transparency bridges that gap.  Authenticity fills the void.  Asking for permission, as it turns out, is more effective than making an apology.

Aligning customer initiatives with customer expectations is now table stakes for virtually any B2C operation – especially one such as financial services where trust factors are so foundational to the relationship. Interestingly, that alignment also goes miles to solve for trust issues now plaguing so many organizations.
Dave Frankland, Principal, Atlaas

Going from a covert, “ask forgiveness” data acquisition mindset to a trust-based “ask permission” mindset doesn’t mean upending current processes.  Like any sizeable and important undertaking, moving towards this new paradigm is best achieved through a sensible crawl/walk/run approach.  And that approach, starts with embedding trust-building factors into the core brand narrative – especially for financial services providers.

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