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COVID-19 has cemented the era of digital banking, but trust in it falls short

  • September 20 2021
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Borrow

COVID-19 has cemented the era of digital banking, but trust in it falls short

By Fergus Halliday
September 20 2021

As life goes digital, banks are still missing the mark when it comes to consumer trust.

digital banking

COVID-19 has cemented the era of digital banking, but trust in it falls short

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  • September 20 2021
  • Share

As life goes digital, banks are still missing the mark when it comes to consumer trust.

digital banking

Trust remains a significant shortcoming for many of Australia’s banks and financial institutions, traditional or otherwise.

According to new research released by GBG, just 14 per cent of Australians said that being big and reputable was enough for them to trust a financial institution with their personal data.

“Businesses across all industries still have a long way to go in building and sustaining digital trust,” said GBG regional general manager for ANZ Carol Chris.

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Importantly, the report noted that the banking and financial services sector was unique in that it featured organisations with both the lowest and highest levels of trust.

As many as 46 per cent of surveyed consumers ranked crypto banks as the type of business they were least comfortable sharing their digital identity and data with, while 33 per cent levied a similar level of distrust towards buy now, pay later operators like Zip and Afterpay.

Just 39 per cent of Australians said that they would sometimes trust their bank with their personal information.

On the other hand, 37 per cent said they trust their bank with their digital identity completely. Add to that 4 per cent who said that they didn’t trust their current bank with that information and were in the process of switching.

The report emphasised that, as the pandemic has increasingly driven consumers’ financial lives online, the stakes for building trust in the digital era have risen accordingly.

Citing a lack of digital trust, GBG found that most consumers still prefer to handle their financial affairs face to face.

Just 26 per cent said they’d be willing to open a bank account in lockdown and only 31 per cent said they’d be willing to buy or sell a house if the process was entirely conducted online.

While no industry has managed to completely secure the digital trust of customers, Ms Chris noted that the familiarity that many consumers have with large entities can help.

Interestingly, 66 per cent of surveyed consumers said they were comfortable giving their digital trust to government websites, which beat out large banks at 55 per cent, superannuation firms at 43 per cent and healthcare providers at 41 per cent.

“Newer business models like fintechs and neo-banks, and lifestyle and entertainment businesses taking a digitalised approach, could benefit from collaborating with the more established segments to gain trust,” Ms Chris said.

“But most importantly, consumers feel more assured when organisations clearly make the effort to integrate frontend security measures, which underscores the need for simple, safe and secure identity verification for onboarding and authentication for re-access.”

COVID-19 has cemented the era of digital banking, but trust in it falls short
digital banking
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About the author

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Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

About the author

author image
Fergus Halliday

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

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