trust 2Trust is tricky. As we all know, losing it is easy, while getting it back – well – sometimes it’s impossible.  The last two years as it tries to regain trust, the financial industry has come face to face with this sentiment.  Globally, 44% of customers say their confidence in the banking industry decreased in 2010, according to a recent Ernst & Young Global Consumer Banking Survey. In Europe, the UK (63%), Germany (61%) and Spain (58%) have seen the largest falls in customer confidence and in the US, distrust in banks was (55%) according to the study.

It may not be surprising that customers remain unconvinced that their bank has learned anything from the economic upheaval of the last few years. And as we have seen, new entrants have taken advantage of this environment to attract more Internet savvy customers away from their banks. But, paradoxically, although they might seem (and in some cases are) a major threat, financials actually have upstarts like Simple and PayPal to thank for helping kick-start a return to faith in the financial industry, however mild. Those banks that can learn from these upstarts and rise to the occasion to offer similar customer-friendly online and mobile services targeted to the individual customer will still have the advantage.

There’s certainly a long way to go for the established banks, but the way forward will be necessarily fueled by technology and the ability to personalize offerings to customers. Using the enormous amount of spending data they have on customers will help to segment and to create the kind of experience that users want. Offering more self-service and the ability for the customer to create their own online environment will also help build the bank’s brand and restore trust.  However, knowing the customer is imperative.  As a recent Bank Innovation article reported, there is still a distinct desire for banks to offer services at physical branches despite other reports that the branch is dead. When it comes to certain transactions, people seem to want the reassurance of speaking to a real person at a bank.

What this means is branches need to improve their service and implement new technologies that can enhance their capabilities while the banking executives need to find a way to create and foster this kind of hybrid service. Knowing what the customer wants — where and how it needs to be delivered — will be the key to finally winning back that all important customer trust.