Have customers lost trust in financial services?
Fri 15 Jul 2016
Rebuilding consumer trust is one of the most critical objectives for the financial services sector across the globe. However, product offers and customer service are not the only issues – the factors that influence consumer trust are continuously changing and evolving. For example, according to a recent survey undertaken on behalf of Volta Data Centres by Red Brick Research, 81% of UK consumers would have more trust in an organisation if it provided more information about how and where it stored customer data.
The majority of UK consumers are still unaware of how their personal data is stored. Just 19% check how a company stores their personal data or how long that data is held for. This is in stark contrast to almost half (49%) that actively check the security status of the website.
Consumers are clearly more mature and more aware of data location and security issues than many organisations perceive; they are not, however, as well informed as perhaps they would like. Given the clear link between trust and consumer confidence in data security, financial services organisations have a significant opportunity to improve consumer education.
Informing customers that their data is stored in London, for example, and that the data centre is subject to multiple levels of physical security, and excellent power and connectivity resilience, provides a strong opportunity to reinforce trust and data confidence with consumers.
Location is key
Confidence in the safety of personal data is becoming a fundamental aspect of decision making. When it comes to the location of stored data, it is clear that UK consumers prefer information to be stored close to home. A huge majority (87%), of UK consumers would feel more confident if their data was stored in the UK, compared to other European countries – with 72% specifically more confident about data being stored in London rather than other European cities.
These figures have a direct impact on consumers’ relationships with financial services providers: 60% of respondents would be more likely to use a company if they knew it stored all its customer data in a secure London location. Three quarters (75%) of consumers are also more likely to provide personal information if they know the company stores its information in a secure UK location.
Financial service organisations should understand the issues that are influencing consumers regarding data location. The chief concern is privacy laws, with 69% admitting they would worry if they knew that their personal information was being held in countries that had different data protection laws to the UK. Of these, 44% would be most worried about their personal data if it was stored in Africa, followed by Asia (18%) and Eastern Europe (17%). In addition, 67% would worry if they knew that their personal information was being held in countries that had different security requirements to the UK.
Consumers are interested in security
The survey also reveals that UK consumers have growing awareness of their role in data security – they are proactive in their efforts to ensure personal data is secure. Almost three quarters (74%) safely dispose of paper documents; 63% use different PINs for multiple cards and 76% make sure that they use a mixture of numbers and letters for online passwords.
Given this awareness, financial services organisations have a strong opportunity to build relationships through education strategies that explain to consumers how best to keep their data safe. For example, today many consumers are still unaware of how their personal data is stored – over four fifths (81%) don’t check how a company stores their personal data. In contrast, consumers are aware of the importance of physical security – with 71% of consumers saying it is important or very important that data is securely stored in a data centre that is manned 24/7/365.
Building long-term trust
Financial services organisations have a chance to rebuild trust and boost consumer loyalty by educating the consumer base about the quality of data security and storage strategies. For example, a company can advertise the fact that the data centre is located in the UK and has multiple layers of physical security – from round-the-clock guards to CCTV and rack level security systems. Publicising the safety and security of personal data is clearly becoming more important to gain and maintain customer confidence.
In an unpredictable world, financial services companies need to take the necessary steps now to ensure that trust in the industry continues to grow. These survey results reveal that consumers are increasingly mature and data aware. In addition to high expectations regarding data and service availability, they are demonstrating growing mindfulness of both data location and security issues when making purchasing decisions.
There is a clear message here for UK financial services organisations. Consumer trust in financial services can be rebuilt by promoting key aspects of data location and security strategy to reinforce confidence.