Deeper distrust between the public and the financial services industry; Belgian banking industry needs to rebuild trust
Financial institutions suffer from a lack of trust and satisfaction, especially Belgium’s Big Four banksDOWNLOAD
Brussels, 30 June 2010 – Today, Deloitte and Vlerick Leuven Ghent Management School presented the results of their study: “Winning Back Your Customers: Retail Banking Study 2010”. The study clearly reveals that Belgians continue to lose faith and trust in their banks. This is not only due to the latter’s poor performance. We found that there is more needed for restoring trust than their financial performance. According to the study, the Belgian banking industry urgently needs to rebuild real trust.
The Retail Banking Study is carried out on an annual basis by Deloitte and Vlerick Leuven Ghent Management School. While the 2009 study focused on distribution strategies and more specifically on the future of branches, the 2010 study has focused on how banks can win back their customers by restoring trust in the financial services industry. The researchers looked at two dimensions of loyalty: trust and satisfaction. The results indicate a strong correlation between the two, and that they both have a major impact on customer loyalty. The survey is based on the responses of over 2,000 retail customers on their experiences with their primary and secondary banking institutions Patrick Callewaert, Partner Deloitte Belgium explains: “What makes this study unique is that we have information from retail customers in Belgium on different types of banks and on two different dimensions of loyalty: trust and satisfaction”.
Two Different Dimensions of Loyalty: Trust and Satisfaction
The Deloitte survey confirms that customers have a low level of trust in the banking industry and their bank; the Big Four and community banks score the lowest on all trust dimensions. Striking findings were:
Patrick Callewaert, Partner Deloitte Belgium comments: “Overall, there is still a perceived distrust between the public and the financial services industry. The public has experienced an imbalance, where the industry holds the lion’s share of the power and is able to make decisions in ways that have a tremendous impact on the banks’ stakeholders. More profound corrective actions are needed to reinforce the image of the financial industry and ensure that this perception of trust is not going to enforce negative behaviour soon."
The study also shows that customers are not satisfied with their banks: only 42% are very satisfied with the overall performance of their bank. Discount and direct banks perform better: 62% of these respondents are very satisfied with the overall performance of their bank.
Some other key findings include:
Prof. dr. Kurt Verweire, Partner and Associate Professor in Strategic Management of the Vlerick Leuven Ghent Management School, indicates: “The fact that customers do not see their bank’s competitive advantage is alarming. In such a competitive industry where banks offer similar products, real differentiation becomes a competitive advantage. The top priority of the Big Four should be to improve customer perception on competitive prices, fees and interest rates, as they show the biggest gap on this attribute. In this instance, it is important to note that we are not suggesting that lowering prices is the way to go. Instead, banks should focus on improving the services attached to their product portfolio and thus create the feeling that the customer is getting value for money.”
Given the future economic outlook, this study recommends that it is even more important for banks to:
This report is based on the results of a quantitative survey of 2,000 Belgian retail banking customers conducted in December 2009. The aim of this research is to measure customer trust, satisfaction and loyalty in the retail banking industry in Belgium and to obtain a better understanding of what customers expect from their banks.
The survey was conducted for Deloitte by TNS Dimarso.
Vlerick Leuven Ghent Management School has deep academic roots. Founded in 1953 by Professor Baron André Vlerick, the School has evolved into the leading business school in Belgium and one of the top business schools in Europe. The School benefits from the amassed knowledge of the two largest Belgian universities, Ghent University and the Catholic University of Leuven.
Vlerick focuses on management education and research in order to meet the needs of managers and entrepreneurs at different stages in their careers. The School offers an International MBA programme and numerous training programmes for company executives. Close connections with the international corporate world lead to practice-based research in co-operation with numerous companies and organisations. Thousands of Vlerick graduates are successfully operating at top managerial levels in manufacturing, services, consultancy, and the public sector in over 100 countries.
Vlerick is one of the few business schools to hold the three most important accreditations relating to the world of management education: EQUIS, AMBA and AACSB.