Why Banks Should Focus On Leveraging Trust To Maintain Its Space In...

Why Banks Should Focus On Leveraging Trust To Maintain Its Space In Finance



Banks have, arguably, built a proud legacy of trust, which has long secured its place and relevance in the world.

That could change, however, particularly if banks don’t embrace the demands of digitally savvy consumers, and contend more imaginatively with the cutting-edge alternative fintech solutions that are vying for the top spot.

The legacy of trust

Banks’ roles in managing and securely storing funds for individuals and businesses was long uncontested. Admittedly, consumers’ options may have been limited, but financial institutions excelled in what they did, and built long-lasting relationships with customers. This is evident in customer loyalty statistics.

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The advent of the Internet and online banking services has shifted how people interact with their banks. As the technology becomes more user friendly and security becomes less of a barrier, more people are willing to engage with their financial institutions in this way, managing their finances remotely.

Their willingness to do so is testament to the trust their banks inspire, and the work they have done to promote new channels of communication and transacting.

This technological shift has been beneficial to banks that have embraced it. Online and mobile banking offer vastly reduced costs incurred by banks, through limiting the number of more costly in-branch transactions. The next shift is unlikely to be quite as positive, unless financial institutions look ahead and adapt.

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The rise of a new generation

Although the current trend seems to be towards alternative banking solutions growing in popularity, when it comes to storing or investing large sums of money, the trust held in the more traditional financial institutions has largely endured.

This may, however, be shifting as the younger, more tech-savvy generation becomes the driving force of the economy.

Consumer scepticism of new fintech solutions will almost certainly diminish, and no longer will slow adoption of new banking and payments platforms be a challenge. The younger generation has grown up with digital technology and applies it to all aspects of daily life, without many doubts over security or privacy.

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As this becomes the norm, the window of opportunity for banks grows smaller. Holding on to traditional banking and outdated approaches will only result in banks stagnating; giving rise to its greatest fear – becoming obsolete.

To prevent being locked out as the window closes, financial institutions must leverage the trust that is still its trump card, by providing innovative value-added services that engage older and younger generations in all sorts of new ways, daily.

Schalk Nolte
Schalk Nolte is the CEO of Entersekt, the first company in the world to provide transaction authentication on mobile phones using certificate technology, securing millions of transactions daily and enabling financial institutions and other enterprises to communicate interactively with customers through mobile devices. Schalk’s vision as CEO is for Entersekt to become the de facto solution for banking security, with a focus on rebuilding consumers’ trust in mobile remote banking and changing the way financial institutions interact with their customers.

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