Business Review Australia: Cognizant Experts Say Australian Banks Must Put Trust at the Heart of Their Digital Roadmap

Carlo Lacota and Manish Bahl

“In the past year, we have seen Australian banks attempting great innovation in the financial technology space,” write Cognizant’s Carlo Lacota, Assistant Vice President, Banking and Financial Services, and Manish Bahl, Senior Director, Center for the Future of Work. “Technological innovations are disrupting, challenging and optimizing the banking industry, but in the digital arms race to create new digital payment systems and offer more online services, banks need to put old-fashioned trust at the heart of their digital roadmap.” Excerpts:

“As financial services are digitizing, financial services organizations are collecting and using an ever increasing amount of personal and digital consumer data to build and deliver innovative services and personalized experiences. But in the data collection race, banks must be alert to the risks that come with having so much data.

In this context, trust is becoming a prominent factor in consumers’ purchase decision-making process. Digitizing without paying attention to building and maintaining trust can have long-term repercussions.

According to a recent APAC study, a third of consumers would be likely to switch their banks if their trust was compromised, and almost half of the consumers in the APAC region said they were willing to switch to a digital start-up if they trusted their approach to data ethics and processes. Additionally, nearly half of the Australian consumers surveyed reported that they would be willing to pay a premium for products and services from companies they trust.

Trust can be influenced by many factors. While many of these factors are intangible, there are three key parameters that drive the ‘trust mix’:

- Show consumers a return on the value of their trust: Consumers are increasingly open to sharing data about themselves. Only, they need something in return, whether it is better customer experience, personalized content or relevant promotions. We call this the ‘give-to-get’ ratio, and it is essential in building a trustworthy relationship with consumers.

- The ‘trust factor’ as a business KPI: Trust has to become a C-suite issue as it converts directly to bottom-line benefits. Only by making consumer trust a business KPI metric that’s measured can it be fully translated into something concrete and add value to the organization.

- Modelize a ‘trust equation’: One of the ways to represent the hidden mechanism of trust is to define it through tangible metrics/variables. The following equation turns this nebulous concept into something more quantifiable and actionable: Trust = (R*C*I)/SO. In this equation, R stands for Reliability, C for Credibility, I for Intimacy and SO for Self-Orientation.

In the digital age, trust is a key business value that must be measured and protected. Australian banks need to embrace transparency and accountability around consumer data to maintain trust, and add trust at the core of their business strategies.”

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