The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services handed down its final report just 18 months ago – a report that was received by the public and the media with much concern and alarm.

Boards and executives have been held accountable and the industry has been focused on taking steps to make amends since. CEO’s have exited, boards and executive teams have turned over, customers are being remediated, remuneration programs have been reformed, and the government remains focused on an ambitious regulatory reform agenda.

Despite these efforts, trust – a fundamental and intrinsic element of banking – was taking time to be rebuilt. Then the COVID-19 pandemic happened.

KPMG’s 2020 Customer Experience Excellence report, published in September 2020, revealed that the pandemic, and associated lockdowns, gave customers cause to shore up that which was most important in their lives. They prioritised going back to basics and essential services, like banking, telecommunications and insurance, observed a net increase in trust.

Throughout the COVID-19 pandemic Banks have demonstrated the critical role they play in the moments that matter. Banks absorbed the initial financial shockwave by deferring loan repayments, waiving fees and pumping additional credit into the economy. As a result, trust in banking improved as the crisis peaked in Australia.



Infrastructure  |  Care for your people  |  Customer communication |  Treatment of stakeholders

“The pandemic has given the sector a strong platform to demonstrate humanity and its societal purpose in helping Australia recover economically.”

Professor Nicole Gillespie
KPMG Chair in Organisational Trust &
Professor in Management, The University of Queensland

A KPMG-sponsored consumer pulse survey conducted in five waves between May and August 2020 revealed an improvement in net trust in the banks from +4 per cent in Wave one to +7 per cent in Wave two. This is where it peaked. Net trust has trended downwards in subsequent waves.

This demonstrates that opportunities continue to exist for the sector to restore trust in the moments that matter – when the purpose of banking aligns perfectly with its customers’ requirements. With payment deferrals ending and temporary insolvency relief measures concluding, the next 6 to 12 months will present such a moment.

“Trust in the banks was harmed because they were perceived to be prioritising profits over people. As a critical part of the Team Australia story, banks demonstrated that their purpose and long-term value creation is intrinsically aligned with their customers. This is their moment to show that they have learned the lessons of the Royal Commission, and that they have fundamentally changed.”

Professor Nicole Gillespie
KPMG Chair in Organisational Trust &
Professor in Management, The University of Queensland

Trust is a complex concept. But there are three key qualities that contribute to the building of trust that banks should keep front of mind: ability, integrity and humanity.

  1. Perceptions of ability: the capacity to understand a customer’s needs and the situation they find themselves in.
  2. Perceptions of integrity: doing the right thing by adhering to accepted ethical and moral principles.
  3. Perceptions of humanity: demonstrating genuine care for those who have been affected by the COVID-19 crisis.

In action, these three qualities can be embedded and demonstrated by adhering to four general principles:

1. Build fit-for-purpose infrastructure to support your vulnerable customers

The humanity of a business is judged on the impact it has on its most vulnerable stakeholders. All stakeholders will expect banks to ‘do the right thing’ – even in the face of complex customer hardship cases.

The situation will be made more difficult by the sheer volume of vulnerable customers who will begin applying for hardship or defaulting on payments. In this circumstance, building fit for purpose infrastructure to support the volume of vulnerable customers will be crucial.

Banks should consider:

  • Analysing customer segments to identify segments or individual instances of vulnerability. Identify early warning indicators and develop robust plans to support identified customers.
  • Providing staff with the resources, skills, authority and delegations to manage a customer’s case from beginning to end.
  • Simplifying the business and leveraging technology to optimise standard processes and focusing resources on the high touch moments of customer interaction.
  • Having third party referrals readily available. Vulnerable customers will need someone to turn to in moments of difficulty.
  • Establishing metrics that are focused on supporting long term value creation – for customers and the bank.

2. Care for your people

A crisis of the current scale is a once-in-a-generation event. Front line staff will be exposed to a significant volume of difficult and gruelling customer circumstances – and they will take memories of these home with them. Prioritising the welfare of your people, keeping them mentally fit and stepping in when moments are tough will make all the difference.

Banks should consider:

  • Making sure your people are ‘eyes wide open’ and adequately prepared for the challenging period they will be facing into.
  • Ensuring leaders are staying in touch with their teams. There is nothing more powerful than hearing from your people how they are doing, and what support they need.

3. Ensure customers have a sense of control

A lack of communication and structure about how customers will transition through to their new normal will amplify their uncertainty and contribute to them feeling out of control. Imposing an outcome on a customer will challenge their trust, but providing them with meaningful options will strengthen their sense of control and give them comfort that their bank is supporting them.

Banks should consider:

  • Keeping customer choices simple and effective. Focus on the agenda to simplify the organisation to make it easier to navigate for customers and staff.
  • Listening deeply to customers and understanding their unique situations.
  • Maximising communications that encourage the customer to proactively contact the bank.
  • Communicating in a timely and responsive manner – doing so will reduce the trust gap.
  • Leveraging customer insights (including complaints), machine learning and AI to monitor services to surface issues early and adapt proactively.

4. Treat stakeholders fairly and transparently – give support options

A core way to show humanity and respect is to explain, transparently and honestly, how a decision was made and why it was decided to be the most fair and reasonable course of action. Following fair and consistent processes when making decisions that impact others is always important for trust, but particularly when such tough choices need to be made. It will also be important to recognise that what constitutes fair treatment will be different to pre-pandemic times – customers will expect more leniency and support.

Banks should consider:

  • Making it simple for customers to make decisions on their own terms.
  • Do not discount the power of human connection. Front line staff with deep empathetic skills will be critical.
  • Leveraging behavioural science to ensure all communications channels are effectively engaging with customers in their own language.
  • Demonstrating leadership and accountability and accepting when things have gone wrong.

We are at an inflection point for customer trust – and the stakes couldn’t be higher. Memories remain about the conduct of banks and financial service providers during the Royal Commission during the GFC and the perception that they prioritised profits over customer outcomes runs deep. The next twelve months will be a period in which customers and the community will form long tenured opinions about trust in their financial institutions. This could be a source of competitive advantage.

By approaching this period with a strong sense of ability, integrity and humanity the banks may yet be rewarded with greater customer trust.


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