Our banks tend to be our constant correspondents, but far from our closest confidants. That’s the finding of numerous studies of the relationship between customers and retail banks over the past year – with a 2016 report from Vision Critical showing that 49% of customers have merely ‘moderate’ trust in their primary financial institute. Among millennials, the figures get even worse, with 58% ready to consider abandoning traditional banks in favour of finance offerings from Google or Paypal.
Taken in aggregate, these study findings show that banks have a degree of exposure to non-bank competitors, and the arrival of PSD2 promises to accelerate this. Banks will lose the advantage of exclusive access to their customers’ data, and will be forced to share it with third parties – the same third parties that are consistently beating them in customer surveys regarding trust in financial services providers (a 2016 EY study showed that 29% of respondents viewed ‘Non-banks, e.g. Google or Walmart’ as a primary trusted source for financial advice, versus 21% who trusted traditional banks more).
Clearly, there’s work to be done in terms of rebuilding relationships with customers – and much as the danger of eroded relationships is magnified by PSD2, it’s PSD2 that could also present the potential solution. Following the implementation of the legislation, customers will begin to have access to financial products and services through a greater number of gateways. Managing your banking through your Google account could become a possibility, for example. There’s a significant opportunity for banks to become chief among these gateways – but they will need to differentiate themselves from non-bank competitors.
