June 7, 2013, by CRBFS Professor James Devlin

We all have a duty to strengthen consumer trust

We all have a duty to strengthen consumer trust

 By Shane Mullins, CEO, Fiscal Engineers


One of the key aims of the recommendations arising out of the Retail Distribution Review was to strengthen consumer confidence. If we take it as read that this has now been achieved we make a dangerous assumption.

RDR is without doubt a significant step in the right direction, but it will not serve as a cure-all for the near-total breakdown of trust that has been allowed to occur over recent years. Such a serious fracture cannot be healed overnight, and it seems unlikely, to say the least, that a transformation of how our industry is perceived was ushered in along with the New Year.

Sadly, it is easy to convince ourselves that we have done our bit. We might congratulate ourselves on embracing a new dawn. We might salute our willingness, however faltering it may have been initially, to toe the regulatory line. We might believe our clients now have nothing to worry about – “and that’s official”. And we might leave it at that until the FSA hands down another edict. Such an approach can only prove counterproductive. It not only smacks of apathy but relies on the presupposition that consumers will forever be content to exhibit a similar bent for lethargy and disinterest.

Rather than celebrating our industry’s supine ability to follow orders in supporting the RDR, we might usefully ask ourselves why so few of us have ever embarked on comparable initiatives of our own and why it has taken one of the most sweeping and seismic changes in the industry’s history to shake us out of our self-imposed stupor. After all, how many of us have ever paused to think about what “trust” actually means from a consumer’s perspective? One depressingly commonplace argument is that trust is a largely intangible concept that cannot be quantified, but such a premise is, perhaps, misplaced. From our research of industry executives during the Question of Trust Campaign, we found that, while almost universally acknowledging trust as one of the most fundamental issues for their boards to address, very few, if any, were actually measuring trust and engagement among their customer base. “You can’t measure trust” was the typical response.


During the initial campaign year we worked with the Centre for Risk, Banking and Financial Services (previously the Financial Services Research Forum), based at Nottingham University Business School and widely regarded as the UK’s most inclusive body for furthering the understanding of financial behaviour. Since 2005 the Centre has produced the Financial Services Trust Index, the only independent benchmark of its kind in the UK, which draws on data gathered from thousands of consumers who take part in biannual online surveys to gauge perceptions of financial services institutions (FSIs). These FSIs are divided into various categories – banks, building societies, general insurers, life insurers, investment firms, credit card companies and financial advisers – and awarded scores on a scale out of 100. Baseline trust (neither positive nor negative) scores scale points of 50. Anything below 50 demonstrates negative trust and anything above 50 positive or “active trust”. The Index represents a concerted attempt to address and measure consumer trust. Instead of airily rejecting it as some kind of abstract form whose existence can scarcely be verified or substantiated, it has sought to define it, quantify it and measure it. As such, notwithstanding that benchmarking is by no means an exact science, it gives us an invaluable idea of where we stand and how we are viewed. What it has clearly established during the past two or three years is that consumer trust has remained remarkably stable since the global financial crisis. Again, however, we should not interpret this as a seal of approval and a cue to relax. This stability is mired in mediocrity. The scores have been consistently unimpressive.

The RDR era may well see them rise. Then again, it could just as easily see them fall if, for instance, the advent of more explicit charging compels clients to re-evaluate the standard of service they receive – and the kind of philosophy that underpins it – relative to what they are paying. A unilateral commitment to raising levels of trust is far more likely to have a positive effect. Customers need to see that the people and organisations they deal with are themselves determined to enhance the client-provider relationship – as opposed to being content simply to bow to the occasional demands of the regulator. At Fiscal Engineers we recently agreed to benchmark our own clients’ perceptions against the industry average revealed by the Trust Index. The experience provided us with an even better impression of how we are perceived by our clients, as well as some important insights into the quality of our offering. Beyond that, though, the exercise demonstrated to our clients that we care about this issue. It also demonstrated that the job of strengthening trust should not rest exclusively with regulators. It sent a message that we do not believe the RDR has done all our work for us and we can therefore sit back and relax until the next decree comes along.


In the words of Professor James Devlin, the Centre’s Director: “It is only through the collective efforts of individual companies to improve their own trustworthiness that consumer trust on aggregate can be enhanced.” The first principle I learned when I entered the profession was that of “uberrima fides” – “utmost good faith”. It remains a principle to which we all have a duty, and neither historical indifference nor the convenient succor of industry-wide intervention should allow us to forget that.


A version of this article was originally published by Citywire.

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