Trust is the main currency in banking - so how can you earn it?

The reason why money is the foundation of every modern economy is that people place trust in its value. Historically, that value was defined by physical commodities. Banknotes could be exchanged for gold and other precious metals, and vice versa. Then, along came paper-based checks, which are basically nothing more than promises to pay. In the era of online banking and payments, those links have been rendered largely irrelevant.

Today, it makes more sense to think about money as the currency of trust. Customers entrust financial institutions to look after their payment information and handle financial operations on their behalf. They expect banks to offer seamless user experiences, and that means collecting, storing, and processing highly sensitive data. As such, financial institutions are custodians not only of their clients’ financial assets, but also of their personally identifiable information (PII).

Digital banking is already established as the new standard in finance management, both for consumers and business clients. That said, the industry continues to experience disruption at the hands of challenger banks and other innovative startups that claim to simplify the customer experience and offer unparalleled convenience. However, this development can also come at the cost of increased risk to information security.

For the last five years, the finance sector has been the most targeted industry for cyberattacks. This is not just because of the inherent value of payment data, but also the even greater value of PII, such as social security numbers, which financial institutions also store. For example, a complete set of payment card details typically sells for between $14 and $30 on the dark web, but all the personal data required to steal a person’s identity sells for around $1,000.

Earning and maintaining trust requires that such information be adequately protected. Almost half of consumers in the US claim they would leave their banks in the event of a data breach, regardless of where the fault lies. Thus, the value of any financial institution is defined by the effectiveness of its security. At the same time, however, better security should not come at the cost of a poor user experience. As such, both customer experience and cybersecurity are critical drivers of trust. To earn and maintain trust, you need both, which is why they should be viewed as inseparable components of the customer experience.

Cultivating and retaining trust requires building a secure foundation where security by design and default enables financial institutions to innovate without adding risk. Meeting the demands of regulatory compliance must also be integral to that goal. For example, financial institutions should avoid using non compliant communications platforms for remote consultations with their clients. Not only do many consumer-grade applications offer inadequate security; they may also present issues with regulatory oversight, as JPMorgan Chase learned upon receiving a $200 million fine for using WhatsApp.

Banks can quantify and qualify trust by the effectiveness of things like information governance, ethical business practices, and transparency. These factors come down to a combination of people, process, and technology. People must be security-aware and educated in the basics of secure practices, such as zero trust security, multi-factor authentication, and accountability. Processes must be transparent and auditable, providing the real-time insights security leaders need to make informed decisions and evaluate their security postures. Technology augments people and automates processes to reduce the risk of human error, enhance scalability, and deliver a modern, digital-first customer experience.

Of course, measuring a concept as abstract as trust is not easy. Thus, perhaps the best way to view it is through the lens of a potential client. Ease and convenience of service and trust in the brand are the two main factors influencing purchase decisions in financial services. With financial services becoming less grounded in physical experiences, institutions must find new ways to engage clients in ways that are personable, convenient and, above all, build trust. Using modern communications platforms is a key enabler of those factors, but only if they are adequately bolstered to meet the constantly growing demands of security and compliance.