16 June 2022 | FinTech
User Trust đ¤ Fintech’s OpportunityÂ
By
USER EXPERIENCE
User Trust đ¤ Fintech’s Opportunity
Iâve been thinking about change and trust a lot lately.
Change is inevitable â and happens fast. Thanks to the macroenvironment, our fintech industry is going through changes left and right.
Trust, though, is constant. It establishes over time, and, often, once youâve earned a userâs trust, youâd have to mess up pretty bad to break it.
These ideologies were buzzing in my mind when a new survey hit my desk, breaking down the demographics of trust as the critical enabler of industry change in financial services.
And guess whoâs making up a large portion of low-trust users?
Women.
Let’s dig in furtherđđ˝
![](https://media.giphy.com/media/1milBuaGrC8UcVH7cM/giphy.gif)
Financial services have consistently appeared as one of the least-trusted sectors in business.
The trust in financial services does outpace consumer trust in State/Local governments, media/entertainment, and the federal government (which scored the lowest in trust levels).
Yet, 53% of women responded with low trust levels in financial services.
Hereâs whatâs missing according to womenâs trust priorities (with my translation of what these mean):
- Keeping my information private (Donât exploit me)
- Resolving issues quickly (Donât waste my time)
- Ease of access to my money (Donât make things arbitrarily complicated)
- Avoiding unexpected fees (Donât play me)
- Treating me with respect (Donât patronize me)
Across the board, consumers are looking for reasons to trust. Hereâs what they want:
- Company transparency about its products and services (84%)
- Solid customer services (81%)
- Community involvement (64%)
One of the most significant factors that influence trust: Simplicity > Knowledge.
Consumers want financial tools that are upfront. Complexity signals distrust, while simplicity can be attractive if it is transparent and truthful.
Bonus points: Consumers also said a companyâs treatment of employees and contributions to social justice and diversity could likely influence their decision.
May I point out that none of those top 3 reasons to work with a financial services company has anything to do with making more money?
Instead, 7 in 10 consumers cite âa companyâs values are aligned with mineâ as a reason for trusting.
The problem today is that users must balance practical considerations with their values when choosing companies. Hereâs where theyâre willing to make trade-offs:
- Price
- Convenience
- Lack of choice
![](https://media.giphy.com/media/PQ652dp4mVviXA3cvu/giphy.gif)
Opportunities for trust-building
Millennials have the highest trust levels in all types of financial companies.
Room for growth lies with Gen Z and Boomers+ (who both have similar levels of distrust in financial services).
Consumers of color have higher levels of trust in online-only banks and investment app companies than white consumers.
Bingo. Fintech companies, thatâs you.
Fintech companies donât have a trust problem. They have an awareness problem. And as their consumer awareness grows, so does trust.
Hereâs the catch: Companies need to understand the feelings and motivations among low-trust demographics and make inroads based on their priorities.
Stop focusing on one-size-fits-all products and refocus on customization.
Still, fintech companies have gained commendable amounts of trust among users in their short lifetimes.
Even those that have had high-profile stumbles, such as Robinhood, still maintain their cult followings.
37% of consumers surveyed by EY say a fintech company is their most-trusted financial services brand, compared with 33% who name a bank and 12% who say they trust a wealth management firm.
51% of Gen Z and 49% of Millennials named a fintech company their most trusted financial brand.
So, while the industry is going through a ton of change that can make anyone feel pessimistic, letâs remember thereâs no better time than right now to lean into the opportunity to increase awareness and trust in fintech.
A lot of consumer lives will be better for it.
![](http://i5.createsend1.com/ei/y/B5/DB4/996/072421/csfinal/WTFintechDividerNew10-990000079e04513c.png)
IMPACT
Betterment Survey Shows Investors Don’t Understand ESG đ¤ˇđťââď¸
A recent survey from Betterment found that 35% of investors arenât interested in ESG (environmental, social, and governance) investing.
But over half of those respondents say their disinterest stems from a lack of understanding of what ESG actually is. â
It looks like we’ve got some educating to do.
Consumers are facing a lot right now: climate change, inflation, political activism, and a greater understanding of corporations’ global impact.
Today, investors are increasingly engaged in the companies they support. And this comes to life via ESG investing.
![](https://media.giphy.com/media/fstgqv79jrn0KnscKo/giphy.gif)
According to data from Morningstar, U.S. sustainable funds netted nearly $70 billion in 2021, a 35% increase over 2020’s high-water mark.
During these trying times, the interest from employees wanting more options to invest sustainably from their HR/benefits teams stood out.
- Nearly half (40%) of respondents don’t know what kind of companies their retirement plan is invested in.
- Of those that do know, almost three-quarters (72%) would be likely to contribute more to their retirement account if they were given the option to invest sustainably.
- 22% have proactively asked their employer’s HR/benefits department if ESG investing options are available in their workplace retirement plan
- Another 36% would be interested to know.
Read or download the full report here.
Check out my interview with Betterment CEO Sarah Levy here.
![](http://i6.createsend1.com/ei/y/B5/DB4/996/072421/csfinal/WTFintechDividerNew10-990000079e04513c.png)
PODCAST
Why Current’s CTO Gave Up Music for Fintech
Trevor Marshall is CTO at Current, the challenger bank giving companies like Stripe and Chime a run for their money.
He was always going to be a classical percussionist, itâs what he worked so hard for and why he moved to NYC to study.
But after an economics lesson, became a math class, which became a computer science course, he knew things had changed.
![](https://media.giphy.com/media/3o6nUZYuBf0hqlf40o/giphy.gif)
In the latest episode of Humans of Fintech, Current’s CTO explains:
- How he helped Current become one of the most influential platforms in fintech
- How music relates to coding and technology
- Why being creative is a huge advantage in his CTO role
- How he leverages his creativity to make himself a great communicator with employees and users
- How Current is helping millions of Americans change their lives by creating better financial outcomes
Dig into the full episode here.
![](http://i7.createsend1.com/ei/y/B5/DB4/996/072421/csfinal/WTFintechDividerNew13-990000079e04513c.png)
WTF ELSE?
- Narmi raises $35M series B
- A handy checklist for fintechs considering international expansion
- Tech firms laying off staff to ‘consolidate’ as funding dries up, say analysts
- Coinbase, Tesla, Compass layoffs: What to do if you face job loss
- RBC inks data access deal with Envestnet
- Why Stripe co-founder John Collison is undaunted by a looming recession
- Launch Africa, the VC firm that has backed over 100 startups, closes first fund at $36.3M
- Indonesian fintech startup Flip raises $100M following second close of Series B funding