Brand Trust in Australian Banking.

HuTrust®Profile Customer trust in Financial Services in Australia 2010 2011

A joint study by mext and Australia Online Research using HuTrust, the scientifically robust model to analyse and build brand trust.

Right ‘after’ the GFC a lot has been written about brand and organisational trust in financial services brands. But what is the state of customer trust now? In Australia, one of the best performing economies in the world? More importantly, what does this mean for financial services organisations and what can they do about it? This brand trust study, although Australia centric, is applicable to many other markets. It was conducted with 2400 Financial Services customers in late 2010 and April 2011.

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Trust is what makes us want to be with one another, interact and transact. It is the proven link between customer behaviour and company performance.

Trust means a lot to your customers. If customers trust your brand…

(just think of your NPS®)

Mext & Concerto, 2008/2009 Net Promoter, NPS, and Net Promoter Score

are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

Trust is not an ‘on/off’ proposition.

We have different levels of trust, distrust and ‘neither trusting, nor distrusting.’ 0 to 4.99 equates to distrust. 5 and 6 represent neither trust, nor distrust – neutral. 7 to 10 is slight trust to strong trust.

0 1 2 3 4 5 6 7 8 9 10

Distrust Neutral Trust

If your organisation uses customer satisfaction or the NPS®: • Distrusters &neutrals = detractors. • Low trusters = neutrals • High trusters = promoters. • The NPS and Net Trust Score tend to be very similar. • Trust, satisfaction and likelihood to recommend always track the same, with

a correlation of between 0.96 and 0.98). • Considering that you only recommend if you trust – a irreversible logic, it is

clear that trust is an equal performance KPI – or driver of performance.

The level of trust your customer has in you and your brand determines your success.

The more customers trust you, the stronger the commitment to you.

To examine brand trust in Australian Banks we use HuTrust®, the correct psychological understanding of trust.

HuTrust® enables you to analyse brand and organisational trust through its 6 distinct facets. The ‘what you are (not) trusted for’. In every interaction with your brand and in every thought about your brand, your customer unconsciously assesses his/her trust in you against these 6 facets. By understanding the 6 drivers of trust, HuTrust® empowers you to build your brand trust and thus your personal and organisational performance. For more information HuTrust® please visit www.hutrust.com.

Trust

Now what do Australian customers feel?

7.1

7.1

6.8

7.8

7.2

5 6 7 8 9

Westpac

National Australia Bank

Commonwealth Bank

Bendigo Bank

ANZ

Personal

Business

0= no trust at all, 10= high trust

• In personal Banking only a smaller regional based bank achieves a solid trusted status.

• The 4 major banks skirt around the trust threshold. • Among business banking customers they are not trusted. • Business customers consistently rate their financial service providers lower.

The major bank’s HuTrust profiles are almost identical.

• The major banks are not differentiated. • They are only well trusted for stability and at a low level trusted to develop

well in the future. • Our qualitative research showed that a large part of the stability trust in

Australia is due to tight government regulation and government guarantees rather than perceived stability of the brand or organisation itself.

‘If the government had not kept them on a tight leash they would have done the same as all the failed banks.’ Business customer, 2010

5 6 7 8 9

Competence

Vision

Benefit

Relationship

Development

Stability

ANZ

Bendigo Bank

Commonwealth Bank

NAB

Westpac

When it comes to being trusted for or vision, none of the major banks is trusted. Even trust in being competent and able to relate to the customer is , on average, non existent. Bendigo Bank, the far smaller contender with a community banking model, is the notable exception.

Considering that all 6 HuTrust facets contribute to (or inhibit) brand trust equally, ample opportunity exists to increase trust through the remaining 4 HuTrust facets. Considering that a shift from 6 to 7 on the Trust Scale results in a doubling of customer loyalty, it is a worthwhile exercise.

Trust

~ 6 to 10

The major banks are only well trusted for two of their six facets of trust.

Let’s take a detailed look at some banks.

Looking at brand trust in the different age brackets reveals further opportunities.

• Commonwealth Bank is not at all trusted in the 18-34, 35-44 and 45-64 age bracket.

• The key issue for CBA is that customers in the 25-34 and 35-64 age brackets transition from long term debt repayment to wealth building.

• They are unlikely to carry a lot of their wealth building business back to CBA.

CBA

• The HuTrust Profile shows that the factor that pulls the level of trust down the most with the 25-34 year olds is lack of trust in an appealing vision.

• However, Relationship, Benefit and Competence are also well off reaching the trust threshold.

A focused investment into understanding what vision CBA needs to be trusted for is likely to help significantly improve brand trust.

Understanding the role the trust facets play in building trust focuses strategy.

CBA

For Bendigo Bank the picture looks very different.

It is interesting that the youngest age bracket has the highest level of trust in Bendigo Bank – likely an effect of the community based banking model.

• While outclassing the major banks in trust overall, for Bendigo Bank the trust weakness lies in the younger age group.

• For Bendigo this is a key inhibitor considering it this age group that gets into financial commitments and lock themselves in for long term.

BEN

Within the 24-35 age bracket the lack of trust in stability is a core issue. This is compounded with a lack of trust in the ability to relate to them and the Bank’s competence. Bendigo Bank would be well advised to understand these inhibitors in depth to make inroads with this critical age group.

And sometimes the results can be very surprising.

BEN

With HuTrust you can substantially increase the brand pull. Using HuTrust® it is possible to analyse and optimise trust on an overall and granular level. Because trust is a proven driver of company performance, the detailed understanding provides a different perspective and reveals new opportunities for brand trust (and performance) building. HuTrust is complementary to accepted NPS and ‘customer satisfaction’ measures, but provides a scientifically, statistically and practically proven framework to build trust from the bottom up.

For more detailed results download the study at www.hutrust.com For further information and HuTrust ®usage, please contact mext

Stefan.grafe@mextconsulting.com www.mextconsulting.com Mext is a specialist customer and consumer engagement consultancy. As pioneers in the HuTrust methodology, mext has applied HuTrust in brand and customer experience development, transformation, corporate affairs and sales performance improvement. Many blue chip clients experienced brand growth of up to 36%.

AOR Brian.fine@australiaonlineresearch.com www.australiaonlineresearch.com Australia Online Research is one of Australia’s leading quantitative research providers. AOR offers clients full service from inception to continuous analysis and advice. Their methodologies are cutting edge and provide the ability to gather and interrogate data in new and innovative ways.

For Sales, BD and customer relations performance please contact athorp@huthwaite.com.au. To contact other licensed and accredited HuTrust Partners in Asia, North America and Europe, please go to http://www.hutrust.com/contact-us