Why trust is good for business

Until recently, caveat emptor ("buyer beware") was the governing principle of commerce and trading.

The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

In financial services, this has been replaced by a requirement to treat customers fairly and more recently under Consumer Duty to ensure ‘good customer outcomes’. Companies that are proactive in addressing this shift will reap the rewards, by appealing more to investors and customers alike.

Loyal customers value trust as much as price.

Loyal customers are often not looking for the best prices, they are looking for providers they can trust over the long term, with even so-called ‘rate chasers’ also now starting to place a greater emphasis on credibility. Many are demanding a better price from providers they trust less, with some going even further by creating lists of providers to avoid or, more restrictive still, short-lists of ones to consider.

With its regulatory backing and substantial implementation cost, the new consumer duty should create the greatest uplift in public trust in a generation. It should - but will it? Because just raising standards is not enough. Customers must be informed about what firms are doing and, harder still, they must find out in a way that they believe.

The race is now on to claim the credit for consumer duty and gain a competitive advantage.

The FCA’s aim with consumer duty is to improve customer outcomes, but neither they nor the industry are in an ideal position to inform consumers what this means for them in practice in a way that they will believe.

That said, the new duty does provide a rock-solid foundation that good providers can use to gain the credit they deserve.  It gives an additional regulatory credibility to claims that they treat their customers fairly, even though many did before. The race is now on to claim that credit, with those firms that succeed gaining a competitive advantage over their peers.

Trust in financial services is not just good for business, it is a primary driver of financial wellbeing.

So step forward the marketeers and business development teams, now is your time to shine. The expensive operational work has been done and a corporate strategy is needed to maximise the benefits. If you are successful you will not only grow your firm’s profitability and market share, but will have played your part in building the financial resilience of your customers. Trust in financial services is not just good for business, it is a primary driver of financial wellbeing.

The FairLife Mark acts as a beacon guiding customers to products they can trust.

Those charged with building the customer recognition their leading firm deserves, might consider evaluating the FairLife Mark. Designed in collaboration with practitioners, trade bodies and consumer groups, this fair-trading mark spans all areas of finance and is destined to become a household name synonymous with trust. It can flag your commitment to your customers in a highly visible manner, backed by the credibility of an independent fair-trading charity.  

To hear how the FairLife Mark can benefit your business contact admin@fairlifecharity.org.