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Building trust in financial services – is it easier said than done?

Rebuilding consumer trust is without doubt one of the most critical objectives for the financial services sector across the globe. However, product offers and customer service are not the only issues – consumer trust is a raft of factors which is continuously evolving and can be difficult to keep track of. For example, according to a recent survey undertaken on behalf of Volta Data Centres by Red Brick Research, 81 per cent of UK consumers would have more trust in an organisation if it provided more information about how and where it stored customer data, an element which is not easily shared, and has led to large failings in customer trust as a result.

The majority of UK consumers are still unaware of how their personal data is stored. Just 19 per cent check how a company stores their personal data or how long that data is held for. This is in stark contrast to almost half (49 per cent) that actively check the security status of the website. While there is a vast difference in these stats, one thing is for sure, customers are very much aware of data breaches, and there is a very real need for financial services to prove that they are handling data with care.

Given the clear link between trust and consumer confidence in data security, financial services organisations have a significant opportunity – indeed a need – to improve consumer education and being transparent with how they are storing and utilising data. Informing customers that their data is stored in London, for example, and that the data centre is subject to multiple levels of physical security, and excellent power and connectivity resilience, provides a strong opportunity to reinforce trust and data confidence with consumers. 

The location of consumer data is significant   

Confidence in the safety of personal data is becoming a fundamental aspect of consumer decision making. When it comes to the location of stored data, it is clear that UK consumers prefer information to be stored close to home. A huge majority (87 per cent), of UK consumers would feel more confident if their data was stored in the UK, compared to other European countries – with 72 per cent specifically more confident about data being stored in London rather than other European cities.

These figures have a direct impact on consumers’ relationships with financial services providers: 60 per cent of respondents would be more likely to use a company if they knew it stored all its customer data in a secure London location. Three quarters (75 per cent) of consumers are also more likely to provide personal information if they know the company stores its information in a secure UK location, therefore providing this information to customers can only be a good thing for organisations.

Financial service organisations should understand the issues that are influencing consumers regarding data location. The chief concern is privacy laws, with 69 per cent admitting they would worry if they knew that their personal information was being held in countries that had different data protection laws to the UK. Of these, 44 per cent would be most worried about their personal data if it was stored in Africa, followed by Asia (18 per cent) and Eastern Europe (17 per cent). In addition, 67 per cent would worry if they knew that their personal information was being held in countries that had different security requirements to the UK.

Consumers are interested in data security

The survey also reveals that UK consumers have a growing awareness of their role in data security – they are proactive in their efforts to ensure personal data is secure. Almost three quarters (74 per cent) safely dispose of paper documents; 63 per cent use different PINs for multiple cards and 76 per cent make sure that they use a mixture of numbers and letters for online passwords. 

Given this awareness, financial services organisations have a strong opportunity to build relationships through education strategies that explain to consumers how best to keep their data safe. For example, today many consumers are still unaware of how their personal data is stored – over four fifths (81 per cent) don’t check how a company stores their personal data. In contrast, consumers are aware of the importance of physical security – with 71 per cent of consumers saying it is important or very important that data is securely stored in a data centre that is manned 24/7 365 days of the year.  

Building long-term trust

Financial services organisations have a chance to rebuild trust and boost consumer loyalty by educating the consumer base about the quality of data security and storage strategies. For example, a company can advertise the fact that the data centre is located in the UK and has multiple layers of physical security – from round-the-clock guards to CCTV and rack level security systems. Publicising the safety and security of personal data is clearly becoming ever more important to gain and maintain customer confidence and demonstrate how seriously security is taken.

In an unpredictable world, financial services companies need to take the necessary steps now to ensure that there is trust in the industry and it continues to grow. These survey results reveal that consumers are increasingly mature and data aware. In addition to high expectations regarding data and service availability, they are demonstrating consumers are very savvy of both data location and security issues when making purchasing decisions.

The good news for financial services companies is that this level of awareness is driving demands for more information about a company’s data storage policies – and the younger generation is even more likely to be swayed by an organisation’s data location strategy. A reported 72 per cent of 25 to 54 year olds confirm they would have more trust in an organisation which provided information about where it stored data – this rises to 87.8 per cent of 18 to 24 year olds.

There is a clear message here for UK financial services organisations. Consumer trust in financial services can be rebuilt by promoting key aspects of data location and security strategy to reinforce confidence, it is those organisations that are clear about security that will steal a march on the competition.

Jonathan Arnold is the Managing Director at Volta Data Centres