Is digitalisation hurting consumer trust?

Banks need to reassess how COVID-19 changed consumer behaviour and preferences, study suggests

Is digitalisation hurting consumer trust?



The strengthening shift to digital banking amid the COVID-19 outbreak has resulted in unintended erosion in consumer trust, according to the latest study by Accenture.

The study found that the trust level of consumers has dropped, with less than a third saying they “trust banks a lot" to look after their long-term financial well-being. This level was substantially down from the 43% recorded two years ago.

While banks are viewing the digitalisation trend as a way to lower costs and remain accessible to their clients, it seems like the rapid adoption of the trend is blurring the "human element" from banking, said Alex Trott, head of banking at Accenture.

"Australian banks have made progress rebuilding consumer trust since the Royal Commission into banking misconduct. But these efforts are facing another major test, as the rapid and abrupt shift to digital banking interaction during the pandemic is threatening the relationship and trust banks have worked to rebuild," he said.

Trott said it is crucial for banks to understand how different channels affect consumer trust. This makes it also important for banks to evaluate how consumer behaviour has been affected by the pandemic.

"Banks who can balance their commercial needs with human connection to their customers will be better off," he said.

For instance, one of the biggest shifts was the preference of clients towards video calls. Prior to the pandemic, only 15% of consumers globally has spoken to a bank advisor through a video call. However, nearly half have said they would be willing to do so when branches reopen. Around 30% of consumers in Australia said they would prefer video calls to face-to-face meetings.

"Digitisation has removed ‘humanity’ from certain banking interactions where consumers are comfortable doing by themselves. These are fine, but the human element is still critical when customers need that support and current operating models just aren’t built to maintain and deepen these relationships," Trott said.

It is interesting to note, however, that Australians are more likely to prefer in-person interaction with bank advisors. Trott said it is critical for banks to re-evaluate how they can "inject humanity" bank into banking experiences to retain customers and balance costs.

"Australians’ appetite for video banking adoption was a standout from our Australia findings, given the general lower digital enthusiasm within the population," Trott said.

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