Here at GoBankingRates.com, we strive to feature the unique voices of renowned finance experts. So, in our ongoing goal to expose readers to new and varied authorities in the personal finance space, we asked experts in finance, economics and politics to give us their opinion on an important question:
“With the recent negative publicity surrounding the banking industry, what one major change do banks need to make in order to regain the trust and confidence of Americans?”
Experts like Donald Trump, Robert Kiyosaki and Sallie Krawcheck, as well as leading experts from the personal finance blogging community, responded with what they believe is needed for the banking industry to improve its reputation and garner renewed trust among the people who rely on their services.
The image below infographic — includes the most poignant selections from their responses. However, you can also read their full answers at the bottom of the page.
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Read the Full Responses
They need to be more upfront regarding their products and services. People are being bombarded with information and the competition has become fierce, which leaves the customer confused and angry. The only way banks can regain the trust and confidence of Americans is to be clear and honest in their dealings. There’s a lot of skepticism at this point and the damage needs to be repaired.
Read the full response.
For the rich, the big banks are their best friends. But if you talk to savers who are earning a negative interest rate on their savings and people who lost their homes during the last down turn in the economy, banks are mean ugly giants.
Unfortunately in the world of big banks, “Too big to fail” seems to mean “Too big to care” —and that is the perception problem with the banking industry today.
I think it’s two things: One is to improve overall customer relations, make it easier for customers to talk to a representative when they have concerns — that’s a big one.
And the other thing…fees. I think the fee system, for a lot of low- to moderate-income consumers, has become unsustainable. Especially with wages remaining stagnant, it’s difficult to maintain a checking account when you’re being hit with maintenance fees or overdraft fees.
Understandably, the top of banks’ lists for regaining trust is: Quit Messing Up. While the myriad regulations and bank compliance improvements since the downturn are certainly having an effect, the rash of new scandals last year does not bode well for “hope as a strategy” in 2013.
Sallie Krawcheck recently wrote a great article on this very topic and asked us to choose a selection from it for this roundup. Read the full article: How Banks Can Regain Trust
The “Move your Money” campaign was great and I’m a big fan of moving money to credit unions…the big irony of that campaign was that, quietly, the big banks were perfectly happy with it because most of the people who did lose their money tended to have relatively less money and were not actually profitable for the big banks in the first place.
I kind of envisage these shadowy executives rubbing their hands and saying, “Why on Earth would I want to rescue myself in the eyes of these depositors? Because, frankly, these depositors mean nothing to me — they’re nothing but a headache.”
Greg Go of WiseBread.com
Transparency: The CARD Act introduced a great level of transparency to the credit card industry with its introduction of the Schumer Box. But this requirement doesn’t apply to banking products (savings, checking, CDs, prepaid cards). If a big bank, say Bank of America, introduced their own version of a Schumer Box, it would create an incredible amount of trust among consumers, and raising their level of perceived trustworthiness is probably the best thing the big banks can do for themselves.
Luke Landes of ConsumerismCommentary.com
I think there are three specific things banks need to do to regain trust.
First, they need to improve technology and other services, like remote banking, mobile banking and different tools to help customers with their finances online.
Second, provide better customer service. Customers are used to being able to call, e-mail, tweet or contact their bank in various ways. If big banks like Chase, Wells Fargo and Bank of America want to get into the good graces of consumers, they need to offer better customer service.
Finally, offer more appealing rates — and don’t make customers jump through hoops to get them either.
The Financial Samurai of FinancialSamurai.com
The one major change banks need to make is to fix senior executive compensation. Banks need to tie compensation to performance so that if a bank loses money, violates laws, takes government bailout money, the executives need to pay for their decisions just as they are allowed to reap tremendous rewards in good times. To allow for senior bank executives to make millions of dollars during the economic crisis is wrong. AIG suing the Federal Government for unfair bailout terms is wrong. Senior executives deserve the pay they get if they create value. If you destroy value and still get paid 30x, 50x, 100 times more than the average employee then something is out of order and needs fixing.
J. Money of BudgetsAreSexy.com
It’s pretty simple really, banks just need to treat their customers as people – not cattle. It’s all about customer service these days, especially as 99% of us have banking A.D.D. and rarely stay loyal. Unless they can turn into my all time favorite bank?
Andrew Schrage of MoneyCrashers.com
While consumer trust has declined over the years in almost every industry, banks rank especially low. However, there are several things banks can do to rebuild this trust. First, banks must improve customer service. Financial institutions were hit hard by the recession just like everyone else, but one of the ways they dealt with that was to cut staffing. This resulted in longer lines, less helpful staff members, and a lower overall level of customer service. Turnover went up at many banks as well, which resulted in team members with little to no training. Banks should consider investing more funds in hiring and training, and pay more attention to the level of customer service they provide.
Banks should also learn that it’s important to actually apologize for errors, and do everything possible to rectify them. Finally, banks could also become much more transparent and clear when it comes to fees. Banks seem to prefer sneaking these in on customers, rather than letting them know up front.
David Ning of Moneyning.com
By solely focusing on the bottom line, we as customers get a sense that everything is about padding their own wallets at the expense of our financial well being. Every time I walk into a traditional bank these days, everybody is trying to sell me one of their financial products even though I don’t have a clue who that person is and have no reason to trust what he says. “Really? You truly believe that buying your 2 year CD at a rate of 0.25% annually is in my best interest? No thanks!”
Sometimes the sales pitch is so ridiculous I wonder why I haven’t change which bank I work with.
In order to regain that lost in trust, banks should realign employee compensation to focus on the long term. Encourage bankers to actually make helpful suggestions to customers by rewarding them for their customer’s good behavior.
What do you think? Have banks lost your trust? What do they need to do to earn it back?