Our Account Director for the Financial Services sector, Barry Clark, shares some thoughts on the question of trust…

Ever since 2008, British banks have been talking about how they can regain trust among consumers. They are not alone. Consumer trust in corporations is in decline and the Leveson Enquiry’s painful ongoing progress only serves to remind British citizens of the unprincipled, unscrupulous and unlawful behaviour of some businesses. Trust is at a premium.

But we wonder just how important trust is.

Consider this: our own research shows that significantly more consumers trust British Airways than budget operator easyJet. Yet easyJet carries more passengers each year than BA. And this is in a market where trust matters. You are, after all, inserting your frail human frame into a pressurised aluminium tube travelling six miles above the surface of the Earth at eight-tenths the speed of sound. If trust matters in any market it matters in airlines.

We’re not saying that trust isn’t important. Rather, our view is that trust is a consideration along with price, value and quality.

Most people wouldn’t trust an estate agent and yet the majority of us choose to employ their services.

Part of the problem is that trust is often talked of as a single, monolithic, entity. For most consumers trust is a complex, multi-layered concept, coloured in shades of grey. Only great brands, offering great service are truly and properly trusted. High-quality service engenders trust.

Trust also happens in the moment. In the moment when we manipulate the mouse over the ‘click to buy’ button. In the moment that we are in the showroom. In the moment when we are test-driving a car. At the point of purchase, previous – rather abstract – notions of trust can be disregarded as price and value tip the purchase decision. Who wouldn’t want to fly to Bergamo for £49? Why wouldn’t you take the chance on an unfamiliar brand if it offered conspicuous value?

We posit that trust is a factor in the purchase decision but it’s not a pre-requisite and neither is it the most important consideration. We’d love to hear your thoughts on the matter.

Photo: (Creative Commons) DrewbieDoo

Earlier this month, Barclays released its new Pingit app - which it says allows account holders to transfer money to other consumers via their mobile (up to a value of £300 a day).

Unlike traditional money transfer services, however, Pingit does not require sort codes or account numbers; individuals simply enter the mobile phone number of the person to whom they wish to make a payment and funds are transferred instantly. And while, at present, only Barclays customers can use the app, the bank says it has plans for a much wider roll-out of the service.

To date, one of the biggest barriers in this area has been security - large numbers simply haven’t believed that mobiles are a safe way to conduct financial transactions. At the start of the 10s, for example, only 20% thought they were as reliable as computers (although this climbed to 30% among the young). Barclays, however, has paid considerable attention to this - claiming its registration process is “watertight” and that all traces of the app can be removed remotely should the handset be lost or stolen.

In combination with its obvious convenience credentials, Pingit can be expected to seriously boost the appeal of mobile payments and 2012 is likely to be the year when the notion becomes much more mainstream. And while we might expect it to be embraced most enthusiastically for small-ticket items, over time many are bound to become more open to the idea of paying for more expensive items in this manner.

I was interested to see that the personal finance tool Mint.com has recently pushed out an update to its iPhone app that added personalised financial advice to their existing tools.  If you’ve never heard of Mint.com before then here is a handy video guide:

[youtube]http://www.youtube.com/watch?v=rK6WLHNYjwM[/youtube]

We like Mint.com.  It’s a great example of how the Quantified Self can be used to help consumers make sharper tactical decisions about their consumption habits.  By pulling together users’ financial  information from disparate accounts, analysing it and presenting it back in a visual, digestible fashion, Mint.com allows its users to take a far more active hand in managing their finances. Crucially though, this comes from a passive approach – allowing a service to automatically collect information rather than inputting it yourself.

We are excited about the possibilities of intelligent software like this becoming part of what consumers expect from online banking in the future.  The last recession was the first digital downturn and although technology didn’t provide outright shelter from financial adversity, what it did do is provide millions of consumers around the world with tools to creatively cope with their changing situation.

The next recession will find a vastly more sophisticated, technologically-enhanced consumer population.  Those who are worried about their outgoings will be able to optimise their spending automatically through smarter banking services.  We will be able to set limits on our spending, have our bank accounts passively monitor and assess our utility bills, credit cards and mobile phone spending and authorise them to automatically switch us to tariffs that are better suited to our consumption patterns.  In an age of optimised spending, budgeting and maximising will become  the norm thanks to technology that integrates these behaviours into every day consumption.  Consumers will become better equipped to ride out period of economic uncertainty and ever-more confident in altering their spending to help them maintain their standard of living.