Trust is an often used term in financial services. What is trust, how is it built, gained or lost? Has trust building changed in the last few years of emerging digital hyper connectivity and will this have an impact on banking? (see “Banking evolution: Service Innovation
,” “No Off Switch
“) Let’s together explore this a little bit …
There are at least four dimensions of trust:
- predictability – ability to predict actions of others and situations which might occur
- vulnerability – giving others the chance to take advantage of vulnerabilities
- value exchange – exchange of values even though there is no full knowledge about the peer
- delayed reciprocity – giving something now with the expectations to be compensated at some future point
The trustor has logical and emotional expectations against the trustee. The logical expectations are often contract related. In case of a loan a payback including interests is a logical expectation. The emotional expectations include the level of comfort and the experiences made during the time where the loan is granted and beyond.
The following little example explores these dimensions. Let’s assume you want to make a ride home and you call a cab.
- An ordinary cab arrives with a smiling driver. Before you enter the cab you need to trust the driver that he knows the place, has serviced the car properly and will not crash the car while you are in. This quick assessment is nothing simple but humans have developed senses during the evolution which support this interpersonal check.
- The cab arrives – but nobody is in. There is a screen showing a friendly face in an office telling you that he is your driver. The cab is remote controlled in a way that it feels for the driver like being in the car. You can again perform the quick assessment described above based on the reduced amount of information and available senses.
- A self driving car arrives with a smiling man in it. He has been mandated by law to sit in the car to intervene in critical situations. You may be tempted to make the quick assessment as in the first scenario but then you notice that this person has limited chance to intervene and influence the sequence of events in an emergency situation as the available time to react would be to short. In essence you notice that you need to trust the system, its sensors and the algorithms.
- A self driving car arrives – completly empty. That’s a different story – the interpersonal element and the usual base for quick asseementis is completly missing. Maybe you should do a short ride first to see if this is safe and then, once you gain confidence into the car, its sensors and algorithms go for longer trip. With good experience, trust is built.
There are futher factors influencing your final emotional assessment – the taxi could be dirty, the driver may have an unpleasant driving style or the climate control may be broken. Even when the target is reached on time, the experience may not great and you may decide not to rely on the services of this company again.
I guess it is rather clear what follows now. All these situations also occur in financial services today. The chance that you meet a banker which is an entrepreneur and personally engages in the trust relationship with you are rare. Such a banker would stand up with his name for the agreement made and would do the best to meet the logical and emotional expectations.
So let’s explore the other three scenarios in a little bit more detail.
- The secenarios have all one thing in common – the ‘driver’ has limited skin in the game.
- Remote meetings with specialists who can come up with creative solutions for complex problems are quite the norm in business and personal live today. Finding the right specialist may already be a challenge and arranging a physical meeting may be close to impossible.
- You may have an assigned employee representing the bank as a sales clerk or relationship manager. The relationship manager will talk with you and then key in the data into some engine which finally processes the agreed business. You may build up a personal relationship to your relationship manager. If this is strong, then you will be tempted to follow him if he moves to another bank. If you trust more the brand, its system and processes, then you will stay and engage with a new relationship manager.
- You may also be routed to a customer services desk which is used to deal with requests like the one you have. With each call you get to know another person – building an interpersonal relation is not intended.
- You may also interact through an electronic channel with the system. A hopefully cool user interface guides you through the necessary steps to get things done.
The objective of most companies is to operate with standard processes leaving the relationship manager very limited flexibility. Hyper connectivity leads to more transparency, the logical element of the trust relationship is performed by an engine and the emotional one is more and more an outcome of the digital experience.
Trust is still a key element in many things. In banking the logical element of trust is more defined by processes, algorithms and infrastructure while the emotional aspect becomes more and more a result of a great digital engagement.
Trust is shifting from personal relationships to systems and experience.
As today’s business challenges span across boundaries within and external so too must leadership. The ever-increasing complexity of today’s world calls for a critical transformation in leadership from managing and protecting boundaries to boundary spanning ( see Never fail to fail, Giving Direction, Dance on the VUCAno) With that it’s business model reflects towards a multipurpose traverse offerings supporting the client’s dynamic behaviors and journeys ( Banking evolution: Service Innovation, Banking Today)
Under the context of digital offering(s) is its simplicity of a single-purpose business model/ offering/ app the wave of the future?
WeChat, or Weixin in Mandarin, is quickly becoming one of the most popular multi-purpose platforms, not just in China, but the world. Released in 2011 by Chinese internet giant Tencent, With nearly 800 million active monthly users, its user base has grown consistently in every single quarter to date. More importantly the point that I would like to focus is it’s actual embodiment of the app.
It’s safe to say that the most ardent of technophiles have at least 100 apps on their smartphone e.g. Facebook Messenger, WhatsApp, Telegram, Skype, Google Hangouts and Duo for instant messaging. Uber, Lyft, Citymapper, Waze, Tripadvisor, AirBnB and Skyscanner for directions/maps. In addition for gastronomy related: Deliveroo, Just Eat, OpenTable, Zomato, Yelp or Urbanspoon. That’s 19 apps to cover three essential functions. WeChat includes capabilities above and more.
WeChat lets users do everything you’d expect it to – instant messaging, sharing life events and chatting to family members. But its feature list extends far beyond custom emojis and profile pictures. WeChat allows you to arrange a catch-up with a friend, pre-order food from a restaurant, book a taxi to the restaurant, get directions on foot, pay for the meal (or split amongst your friends at the time of payment), check movie times and book tickets, and also purchase other items. All without hitting the home button.
The possibilities for brand-to-consumer engagement on WeChat are almost unparalleled anywhere else in the world, and this is almost entirely due to the way the app manifests itself in as many aspects of daily life as possible. By knowing a person’s current location and when they usually have dinner, all in one app, fast-food brands can hyper-accurately target consumers when they’re most inclined to purchase. And by tapping into the app’s data on payments and money transfers, marketers can get a good idea of when, where, how and why users spend their money, before using this to hyper-accurately target their audience when they’re most likely to buy. With such understanding of a client’s behaviour enables to proactively provide financial wealth services be it from suggesting dynamic relevant payment methods to making recommended investments, wealth management and advisory, etc…
The need for banks to traverse beyond its current boundary is imperative to regain expediency with the new paradigms ( see Digital Tur Tur).
The term is not at all a new trend or technology. Previously known as pervasive computing where due to technological advancement and cost feasibility the trend of embedding computational capabilities into everyday objects. This makes them effective in communication as they are network interconnected and performing activities of the end users without a centralised system.
Ubiquitous computing integrates via different devices, industries, environments, applications (e.g. wearable devices, appliances, fleet management, sensors). The goal of it is to make devices “smart” in the form of creating a sensor network capable of collecting, processing and sending data via the context and activity that it is under.
We had seen first phases of such capability involving wireless communication and networking technologies, mobile devices, and RFID tags. With the exponential advancement in internet capabilities, usage of voice recognition and artificial intelligence, the growth and adoption of embedding ubiquitous computing significantly increases now often associated and known to be the internet of things (IOT)
Gartner predicts approximately 8 billion connected objects to be use by the end of 2017 and it appears to be growing. In order to cope with the growth of IOT a heavy incorporation of artificial intelligence (AI) fueled autonomy will be required. An AI-driven era of IOT becomes the key building block to herald an increasingly seamless experience and hyperconnectivity as users and their digital counterparts concurrently transpose from one medium/device to another, between multiple environments, the physical and digital ecosystem.