Designing for Trust in Digital Banking

By Anna Ho, Associate Director of Strategy

I am admittedly part of that dying breed of banking customers who prefer personal checks and brick & mortar banks. I prefer them over payment share apps and internet banking even though I know that paper and brick are not any more secure or reliable than their digital alternatives. Despite the promise of greater convenience, intelligence, and personalization, I just can’t seem to convert fully to relying on digital banking services. And, it looks like I’m not alone.

In their study of mobile banking users, the Federal Reserve found that a large majority of mobile banking customers are task-only users. They use their smartphones to perform specific banking tasks, like checking their balance or paying a bill, but do not rely on mobile apps for their general banking needs. In addition, it’s these task-only users who tend to perceive mobile banking as somewhat unsafe.

Digital banking may be on the rise, but trust in and overall satisfaction with the user experience of digital banking services is still tenuous. In fact, as J.D. Power found in their 2018 U.S. Retail Banking Satisfaction Study, digital-only banking customers were the least satisfied among all banking customer segments. Communication is where digital banks are falling short. Technology may be great for solving certain customer pain points, but it’s still missing the mark when it comes to the customer experience. Why is that and what are digital financial service providers to do?


The Challenge: Building Affective Trust

In our experience, digital financial services appeal to customer minds, but not their hearts. This emotional bond with customers is what’s known in social psychology as affective trust. Affective trust is based on perceptions of care and concern and emotional connection. It is different from cognitive trust, which is based on perceived reliability, dependability, and competence. Both types of trust play an important role in building long-term service relationships, but the problem is that digital financial services tend to focus on the latter. They tend to focus more on enhancing security, knowledge delivery, and transactional protocols, resulting in user experiences that are easy-to-use but lacking in emotional impact.

Emerging technologies, like blockchain and new information security models, will be instrumental in addressing customer concerns about fraud and cybersecurity risks. In turn, these emerging technologies will bolster cognitive trust. However, an investment in smart technology solutions will not be enough to drive long-term relationships with digital consumers. As the Harvard Business Review reports in their study on digital trust, if the overall user experience is not managed well, measures to enhance digital privacy, security, and accountability (e.g., multiple passwords, identity authentication) can actually make users less willing to engaging online.


The Opportunity: Design for Emotional Connections

If you are looking to move the dial on customer trust and engagement for your digital financial service, you need to appeal to both the hearts and minds of your customers. You need to deliver a motivational solution that shows customers you put their needs and interests first.

Here are four questions you should ask about your digital financial service to ensure that you are providing a motivational user experience for your customers.


Does the experience lead with empathy?

The need for financial services is commonly tied with big life decisions like the purchase of a home or an investment towards one’s future. So, while your customer may come to you seeking information and service, don’t overlook their underlying need for connection and support. For starters, what does your solution do to ease customer anxieties up front? Once you’ve established an emotional connection, how does your solution maintain the connection? How does that connection ensure that customers have a vested interest in committing to a long-term relationship with your service or brand?


Where in the experience does your service first demonstrate value?

According to Forrester, “53% of US online adults are likely to abandon their online purchase if they can’t find a quick answer to their question.” Digital customers have come to expect value on-demand. How many clicks and questionnaires does it take before you provide value to your customers? What are you doing to maintain equity in the information exchange process so that users aren’t left feeling like they have to provide an extensive amount of personal details, or commit to your service, before receiving any value?


Does the experience empower decision making?

Financial decision-making can be emotional; generic tips and advice aren’t cutting it. Researchers at the University of Florida, for one, found that people are less likely to avoid financial decisions when those choices are reframed around decisions about their lifestyle or desired goals. How does your service experience speak to the personal goals of customers? What features do you have in place to ensure that users feel agency and in control of their financial journey, and aren’t just passive recipients of information from your service?


Does the experience assure transparency?

In their annual global study of trust, Edelman found that the number one factor that increased trust in financial service companies was easily understood terms and conditions. Relatedly, a lack of transparency in costs or products was the most influential factor in decreasing customer trust. Transparency is critical. How and when in the experience do you surface terms and conditions to customers? How easy is it for customers to access these terms and conditions outside of the initial user flow?

The reality is that customer trust is multi-dimensional.

As the adoption of mobile banking and digital financial services continues to grow globally, success will come to those who establish trust throughout the digital experience. It’s time to take a closer look at your digital solution and ask what your service is doing to build multiple dimensions of trust with each customer and convince undecided consumers, like me, that you have our best interests at heart.


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