Australian Banking - Brand Trust.

Brand Trust in AustralianBanking.HuTrust®ProfileCustomer trust in Financial Services inAustralia2010 2011A joint study by mext and Australia Online Researchusing HuTrust, the scientifically robust model to analyse and buildbrand trust.

Right ‘after’ the GFC a lot has been writtenabout brand and organisational trust infinancial services brands.But what is the state of customer trust now? InAustralia, one of the best performingeconomies in the world?More importantly, what does this mean forfinancial services organisations and what canthey do about it?This brand trust study, although Australiacentric, is applicable to many other markets.It was conducted with 2400 Financial Servicescustomers in late 2010 and April 2011.HuTrust is trademark of ifm in depth research and strategies and Stefan Grafe. The HuTrust Model, its facets,descriptors and statements are copyright ifm in depth research and strategies and may not be used, reproduced orstored in any medium unless expressly permitted by ifm. HuTrust is applied in Brand trust development, Customer experience & valueproposition development, Sales and Business Development Performance & Training, Employer branding & Employee engagement, Manager Coaching &Leadership training, transformation and change management and corporate affairs & PR. All images copyright Istock and used under license by ifm & mext

Trust is what makes us want tobe with one another, interactand transact.It is the proven link betweencustomer behaviour andcompany performance.

Trust means a lot to your customers. If customers trust your brand… (just think of your NPS®)Mext & Concerto, 2008/2009 Net Promoter, NPS, and Net Promoter Scoreare trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

Trust is not an ‘on/off’ proposition.We have different levels of trust, distrust and ‘neithertrusting, nor distrusting.’0 to 4.99 equates to distrust.5 and 6 represent neither trust, nor distrust – neutral.7 to 10 is slight trust to strong trust.0 1 2 3 4 5 6 7 8 9 10 Distrust Neutral Trust If your organisation uses customer satisfaction or the NPS®: • Distrusters &neutrals = detractors. • Low trusters = neutrals • High trusters = promoters. • The NPS and Net Trust Score tend to be very similar. • Trust, satisfaction and likelihood to recommend always track the same, with a correlation of between 0.96 and 0.98). • Considering that you only recommend if you trust – a irreversible logic, it is clear that trust is an equal performance KPI – or driver of performance.

The level of trust your customer has in youand your brand determines your success.The more customers trustyou, the stronger thecommitment to you.

To examine brand trust in Australian Banks we use HuTrust®, the correctpsychological understanding of trust.HuTrust® enables you to analyse brandand organisational trust through its 6distinct facets. The ‘what you are (not)trusted for’.In every interaction with your brand andin every thought about your brand, your Trustcustomer unconsciously assesses his/hertrust in you against these 6 facets.By understanding the 6 drivers of trust,HuTrust® empowers you to build yourbrand trust and thus your personal andorganisational performance.For more information HuTrust® pleasevisit www.hutrust.com.

Now what do Australian customers feel?• In personal Banking only a smaller regional based bank achieves a solid trusted status.• The 4 major banks skirt around the trust threshold.• Among business banking customers they are not trusted.• Business customers consistently rate their financial service providers lower. 7.2 ANZ 7.8 Bendigo Bank 6.8 Commonwealth Bank Personal Business 7.1 National Australia Bank 7.1 Westpac 5 6 7 8 9 0= no trust at all, 10= high trust

The major bank’s HuTrust profiles are almost identical.• The major banks are not differentiated.• They are only well trusted for stability and at a low level trusted to develop well in the future.• Our qualitative research showed that a large part of the stability trust in Australia is due to tight government regulation and government guarantees rather than perceived stability of the brand or organisation itself.‘If the government had not kept them on a tight leash they would have done thesame as all the failed banks.’ Business customer, 2010When it comes to being trustedfor or vision, none of the major Stabilitybanks is trusted.Even trust in being competent Developmentand able to relate to the ANZcustomer is , on average, non Relationship Bendigo Bankexistent. Commonwealth Bank Benefit NABBendigo Bank, the far smaller Vision Westpaccontender with a communitybanking model, is the notable Competenceexception. 5 6 7 8 9

The major banks are only well trusted for two of their six facets of trust.Considering that all 6 HuTrust facetscontribute to (or inhibit) brand trustequally, ample opportunity exists toincrease trust through the remaining 4HuTrust facets.Considering that a shift from 6 to 7 on Trustthe Trust Scale results in a doubling ofcustomer loyalty, it is a worthwhileexercise. ~ 6 to 10

Let’s take a detailed look atsome banks.

Looking at brand trust in the different age brackets reveals furtheropportunities.• Commonwealth Bank is not at all trusted in the 18-34, 35-44 and 45-64 age bracket.• The key issue for CBA is that customers in the 25-34 and 35-64 age brackets transition from long term debt repayment to wealth building.• They are unlikely to carry a lot of their wealth building business back to CBA. CBA

Understanding the role the trust facets play in building trust focusesstrategy.• The HuTrust Profile shows that the factor that pulls the level of trust down the most with the 25-34 year olds is lack of trust in an appealing vision.• However, Relationship, Benefit and Competence are also well off reaching the trust threshold. CBAA focused investmentinto understandingwhat vision CBAneeds to be trustedfor is likely to helpsignificantly improvebrand trust.

For Bendigo Bank the picture looks very different.• While outclassing the major banks in trust overall, for Bendigo Bank the trust weakness lies in the younger age group.• For Bendigo this is a key inhibitor considering it this age group that gets into financial commitments and lock themselves in for long term. BENIt is interesting that theyoungest age brackethas the highest level oftrust in Bendigo Bank –likely an effect of thecommunity basedbanking model.

And sometimes the results can be very surprising.Within the 24-35 age bracket the lack of trust in stability is a core issue. This iscompounded with a lack of trust in the ability to relate to them and the Bank’scompetence.Bendigo Bank would be well advised to understand these inhibitors in depth tomake inroads with this critical age group. BEN

With HuTrust you can substantially increase thebrand pull.Using HuTrust® it is possible to analyse andoptimise trust on an overall and granular level.Because trust is a proven driver of companyperformance, the detailed understandingprovides a different perspective and reveals newopportunities for brand trust (and performance)building.HuTrust is complementary to accepted NPS and‘customer satisfaction’ measures, but provides ascientifically, statistically and practically provenframework to build trust from the bottom up.

For more detailed results download the study at www.hutrust.comFor further information and HuTrust ®usage, please contact mext Stefan.grafe@mextconsulting.com www.mextconsulting.com Mext is a specialist customer and consumer engagement consultancy. As pioneers in the HuTrust methodology, mext has applied HuTrust in brand and customer experience development, transformation, corporate affairs and sales performance improvement. Many blue chip clients experienced brand growth of up to 36%. AOR Brian.fine@australiaonlineresearch.com www.australiaonlineresearch.com Australia Online Research is one of Australia’s leading quantitative research providers. AOR offers clients full service from inception to continuous analysis and advice. Their methodologies are cutting edge and provide the ability to gather and interrogate data in new and innovative ways. For Sales, BD and customer relations performance please contact athorp@huthwaite.com.au. To contact other licensed and accredited HuTrust Partners in Asia, North America and Europe, please go to http://www.hutrust.com/contact-us

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Australian Banking - Brand Trust.

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