This isn’t the first time the public has seen wealth and greed in financial markets screw up.
Satoshi Nakamoto created Bitcoin in 2008 in response to the financial crisis and over-leveraged banks gambling away customer dollars.
Oh, the irony.
For good reason, financial services have consistently appeared as one of the least-trusted sectors in business.
And guess who has the lowest level of trust?
53% of women responded with low trust levels in financial services, according to an American College of Financial Services survey.
Here’s what’s missing according to women’s trust priorities (with my translation of what these mean):
- Keeping my information private (Don’t exploit me)
- Resolving issues quickly (Don’t waste my time)
Ease of access to money (Don’t make things arbitrarily complicated)
- Avoiding unexpected fees (Don’t play me)
- Treating me with respect (Don’t patronize me)
Across the board, consumers are looking for reasons to trust. Here’s what they want:
- Company transparency about its products and services (84%)
- Solid customer service (81%)
- Community involvement (64%)
One of the most significant factors influencing trust is 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 company’s 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 “a company’s values are aligned with mine” as a reason for trusting.
The problem today is that users must balance practical considerations with their values when choosing companies. Here’s where they’re willing to make trade-offs:
- Lack of choice
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.
Here’s the catch: Companies need to understand the feelings and motivations among low-trust demographics and make inroads based on their priorities.
Stop focusing on driving engagement and refocus on customization and community.
The fallout from the Sam Bankman-Fried drama is still being felt and will continue to be felt in the fintech world.
Some companies are rethinking their strategies in light of the public’s wariness of fintech firms. Others are using the situation as a learning opportunity to improve their practices.
So, while the industry is going through a ton of change that can make anyone feel pessimistic, let’s remember there’s no better time than right now to lean into the opportunity to increase community and trust in fintech.
A lot of lives will be better for it.
(PS: Get a girl who can reference sports metaphors and Beyonce in her newsletter).