The Australian Bankers’ Association (ABA) has just released new research which used the Edelman Annual Trust Barometer to assess community trust and confidence in Australia’s banks. 

While progress has been made, research indicates that Australian banks are behind the global benchmark in terms of trust.

“Based on the Annual Edelman Trust Barometer study released in January 2017, Australia remains 4 points behind the global average,” the report said. “Hence, while there is more work to be done to increase trust in the sector, Australians acknowledge that the banking industry is a well-regulated industry that is more stable than many of its international counterparts in Europe.

“Overall, the two percentage point year on year increase in trust from 2016 to 2017 in the Financial Services sector, and the increment in Australians’ trust from the June 2017 study, has demonstrated a positive shift from ‘distrusted’ to ‘neutral’.”

Reinforcing consumer protections  

In April 2016, ABA initiated the Banking Reform Program for consumers across Australia, with the intention of protecting consumer interests, increasing transparency and accountability, as well as building consumer trust and confidence in banks. 

Some of the initiatives furthered by the program include:

  • Reviewing product sales commissions and product based payments
  • Making it easier for customers when things go awry
  • Reaffirming support for employees who “blow the whistle” on inappropriate conduct
  • Removing people from the industry for poor conduct
  • Reinforcing the commitment to customers in the Banking Code of Practice
  • Supporting the Australian Securities and Investments Commission (ASIC)

“This research is being conducted to assess consumer perceptions of the Banking Reform Program,” the report said. “[It] is the second consumer research study to track the program as it is implemented and progressed. The research for this report was conducted before the Government announced the Royal Commission into misconduct in the financial services industry.”

Consumer sentiment is improving

Edelman polled 1,000 Australians in November 2017, following the first round of research in May 2017. Generally, respondents feel more positive about the direction of the banking industry. 

Key findings include:

  • Seventy-seven percent of consumers think their main bank is “becoming more customer-focused”, up 14 percentage points since June 2017
  • Forty-four percent now feel the industry is headed in the right direction (up five percentage points since June 2017)

Consumers remain positive towards the Banking Reform Program, with over half believing it will have a positive impact on levels of trust in the industry, as well as positively influencing confidence and transparency.

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