Trust in banks slightly improved: "Still plenty of work to be done"

Consumers trust banks slightly more today than they did a year ago, according to the Trust Monitor for Banks for 2017. General trust in the sector increased from 2.8 in 2016 to 2.9 in 2017, on a scale of 1 to 5. The Dutch Banking Association (NVB) commissioned German research institute GfK to conduct a survey of 23,000 consumers. This is the third time the Trust Monitor for Banks has been published.

Banks use the results of the annual Trust Monitor to define a number of areas for improvement. This year the focus will be on working more proactively: banks will let their clients know that a change in their lives - such as a divorce or a new job - could affect which product is best for them. Banks will also be more transparent about the components of financial products and about their role in society.

More mobile

Consumers rate banks' online services extremely positively (4.3 in 2017). A notable development is that fewer clients make use of internet banking, and more are using mobile banking: this percentage rose from 46% in 2015 to 57% in 2017. Consumers rate banks' professionalism slightly higher, with the score rising from 3.7 in 2016 to 3.8 in 2017. Banks score well on complaints and feedback management (4.2), according to the Dutch Authority for the Financial Markets (AFM). This is the first time that the supervisory authority has rated complaints and feedback management.

Work to be done

Chris Buijink, Chairman of the Dutch Banking Association: 'I am pleased with the upward trend, but there's still plenty of work to be done, especially in terms of transparency - we have to do even better. For instance, during panel discussions, consumers stated that they want to know what's going on with their savings, they expect full transparency about their banking affairs and they appreciate proactive advice.'

Trust in general

This year, too, consumers indicated that they trust their own bank more than they trust the sector as a whole. But the difference is smaller: the score for trust in their own bank equalled that of last year (3.2), while trust in the sector rose to 2.9. A large majority of respondents are 'neutral' regarding trust in the banking sector: 57% have neither a lot nor a little trust in the sector. In addition, 17% of the consumers surveyed have a lot of trust in the banking sector and 25% have little trust. This outcome is comparable with research conducted by parties such as the Dutch TV show Nieuwsuur and Edelman (Trust Barometer), published earlier this year.

'Transparency' gets a 'satisfactory'

Consumers give banks a 'satisfactory' when it comes to transparency. This year's Trust Monitor for Banks included more in-depth questions on transparency, the aspect that has the biggest influence on trust in banks. At the same time, consumers say transparency is at the top of their list for banks looking to improve their reputation.

Recommendations of Advisory Council

The independent Advisory Council, which has given recommendations since the Trust Monitor was first held, advises banks to think carefully about their personal interaction with clients. 'Personal contact makes clients feel like they have a relationship with their bank rather than being just a number.' Consumers still think that banks could be more client-oriented. The Advisory Council says banks need to continuously devote attention to proactively helping clients with their financial affairs.

AFM opinion of clients' interests

In addition to the Gfk consumer survey, the Trust Monitor for Banks includes the opinion of the Authority for the Financial Markets (AFM) on the extent to which banks put clients' interests first. The score for mortgages decreased from 3.8 in 2016 to 3.7 in 2017, also on a scale of 1 to 5. The AFM urges banks to work harder for homeowners who might have trouble making their mortgage payments in the future. The score for investment also went down, from 3.8 in 2016 to 3.7 in 2017. The AFM's score for how banks handle payment arrears was 2.8, an improvement on the score in 2015 (2.2). The score for lending declined from 3.0 in 2016 to 2.4 in 2017. The AFM notes that not all parties correctly apply the VFN (Dutch Finance Houses' Association)/NVB lending norms when the loan commences. The AFM sees that market-wide steps have been taken to reduce the number of (virtually) interest-only loans. The AFM has called on banks to further reduce the number of interest-only loans (consumer credit) and to better coach clients with payment arrears.