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In whom do we trust?

One of the reoccurring conversations in banking is trust.

I’ve blogged about it many times, and it’s a point that arises in almost every conversation about how banks prosper.

There are two sorts of trust here however.

Trust in banks to do the right thing, and trust in banks to manage our money with accuracy.

The former is definitely not the trust that exists in banks, with almost two-thirds of people in Britain saying that they no longer trust banks to do the right thing.

If trust in banks to do the right thing has gone, could trust in banks to manage money accurately also disappear?

This is a core question as it’s the one thing bankers believe whole-heartedly: people trust us to process their payments.

This struck me in a conversation about remote banking.

When you no longer see the bank, talk to the bank, deal with the bank … do you still trust it?

The answer from a bank representative is ‘yes’. 

The explanation is that if you are buying something online, is it the online retailer you trust with your payment or the card processer or the bank that issues the card with which you are paying?

Banks believe it is the card processer and bank that you trust at this point, not the retailer.

It’s an intriguing discussion as this is the dynamic that is changing, as we see Amazon and Apple and others moving into the payments market.

Amazon wraps up a payment in a one-click process and Apple do the same in iTunes.

As I blogged recently, ‘pay by Facebook’ may be a reality soon.

So, in whom do you trust with your payment?



About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • tonyw

    Of course south park have a take on this

  • I do not need to see the bank in order to trust it. Trust is based on more than that, meaning sight. I trust my bank because I am given good advise upon request, an interesting loan upon need. That’s it.

  • As always, we conflate two things – payments and money. Separate these two things out and the question of trust likewise bifurcates, and clarity surfaces.
    We of course can trust Facebook, Apple, Microsoft, Google, indeed any big tech firm, to process our payments. Someone said banks are 70% IT firms these days. Hint hint. The techniques to do secure payments in digital form have been laid out for over a decade. I sometimes call it financial cryptography but there are plenty of weaker alternatives that have survived (e.g., the beginner mistake is to use single-entry accounting, and it doesn’t not work…).
    Trust in payments is an entirely separate question as to whether we can trust these same people to manage our money. Frankly, that question makes no sense – tech firms don’t understand much or anything about money, which is why Apple, Google and the like are sitting on huge warchests. Even the term “warchest” indicates we (the media) and they don’t know what to do…
    It is that issue – trust in managing money – which is the core of banking, the creed. Nothing to do with payments. It is precisely that issue which will be tested in the coming months or year or two, if the doomsayers are on the money, as Eurorot spreads outwards. Pun intended.
    And, there isn’t much banks can do about it at this stage. The normal trick of banks is to change nothing, and advertise the preferred message. But that won’t work this time. Even banks that are clean and safe and have their balance sheet able to withstand the failures of some national treasuries … will catch the untrust from the ones who fall around them.
    Whatever a bank does in strategy terms – it should not base its plan on winning back the trust of the people. That’s a dead loss for the foreseeable future.

  • I too have blogged many times about trust and it’s loss in financial services, albeit from more of an operational and team perspective (http://talesofanactivemind.blogspot.co.uk/2011/11/can-you-be-trusted-is-this-limiting.html).
    I was once shown a model formula that described the components of trust and all the things that have been mentioned here are there. Credibility, reliability and intimacy (in terms of knowing the other party) are on the top line, ie the numerator, and are a product ie if any is absent or near absent trust is hard to find. More importantly self interest is the bottom line or denominator. This is how much theother party will put their interests ahead of yours or shared interests.
    This denominator is powerful and what is killing trust in financial services right now.
    Coming back to this blog…..in payments the opportunity for self interest to triumph is less than in managing money, where in many parts of the system it has been rife. The old adage to follow the money is so true, or at least it has been, in locating self interest.

  • we were tangentially involved in the cal. state data breach notification act … having been brought in to help wordsmith the cal. state electronic signature act. Many of the participants were heavily involved in privacy issues and had done detailed public surveys. The found the #1 issue was identity theft, primarily the form of account fraud from fraudulent financial transactions involving information from breaches. There was little or nothing seemed to be done about breaches and it was hoped that the publicity from the breaches would motivate corrective action. The issue is that security issues are normally prompted by effort for *self* security. Most of the institutions with the breaches had little at risk, the fraudulent financial transactions would be against the public (and therefor had little motivation to prevent the breaches).
    other issues about making the information useless to crooks (rather than trying to prevent the breaches) are found in Ian’s blog in discussions about “naked payments”.

  • It’s pretty clear that if banks wanted to be trusted they could be.
    Hit the link below for Lynn’s essays on Naked Payments.