Resource:

Bursting the bubble

13 November 2007

Trust takes years to build and only suspicion to destroy, says Gary Stickland-Clark.

Trust, like confidence, faith and belief, is somewhat like a bubble. There is just about sufficient evidence of its presence for us to refer to it, believe in it and even rely upon it. Its integrity however, is entirely dependent upon an impossibly delicate membrane, which can only exist if all parts of it are entirely intact. If any part of that membrane is compromised it is completely destroyed. Just like trust, it is either intact or gone; there is nothing in between.

This concept of trust plays an enormously important role in the whole operation of our commercial and fiscal infrastructure. We trust that our notes and coins are worth what our governments say they are, that the banks will look after our money and return it when we ask, that payments made with a plastic card will be honoured and so on.

Having initially said that it would not 'prop up' any bank in trouble, the UK Government had its bluff called and realised that the loss of trust that would follow in the wake of a failed bank would have a catastrophic effect. So with a mumbled excuse they swivelled 180 degrees and have underwritten Northern Rock. Putting aside any political rights and wrongs, imprudent precedents this may set and other crowd pleasers, the move is at least 'reasonable' in that the bank has the financial means to offer this reassurance.

What is more remarkable is that subsequently they have offered the same assurance to savers with all other banks. This gesture confirms my point. Compare the sums each major lender has on loan relative to their deposits and you will see that, with a couple of notable exceptions, most are very highly geared. Should the unimaginable actually happen and savers simultaneously demand that the banks return their money, not only could the banks not produce it, but the Bank of England has relied heavily on the trust bubble remaining intact as they simply don't have the resources to meet such an obligation either. So why make a promise that, in extremis, simply cannot be kept? The answer is to place a further protective shroud around the bubble of trust in the banking system and thereby maintain the balance in the economy.

This trust is vital if control is to be maintained over currency value, interest rates and inflation. Lose the trust and the lubricant which enables the cogs of the financial markets to turn smoothly goes sticky. Banks become less prepared to lend to each other and the basic operational premise upon which the economy is built looks decidedly wobbly.

The events at Northern Rock and in sub-prime lending generally, have given us a stark reminder that savings held with large organisations are not as safe as houses, and that houses aren't necessarily that safe either. Both realisations shatter two key foundations upon which consumers have come to rely.

To rest easy in our beds (now less likely with the lump sum stashed under the mattress) we need to believe that the machine that is the economy is intact and well oiled. And as we have just seen, for individual consumers this sentiment applies first and foremost down at the level of each individual cog - the activities and reputation of the individual organisation holding our savings.

So the responsibility doesn't rest just with governments and guardians of statistically driven monetary policy. Through their actions individual organisations can influence the economy. The cogs of the economy are the organisations that drive it and make it move each day. Financial service providers make up a number of these cogs, playing a part in the stability of the economy and therefore their business practices and image need to cultivate respect and trust. To a lesser or greater extent, that starts with the lender conducting its business prudently.

If, as it has been said, financial services providers are now essentially technology companies, it begs the question of the degree to which that trust must necessarily ripple down to the relationship between the financial services providers and the technology partners that underpin their operations.

As a strategic technology provider to the financial services industry, this is an important point for myself and my organisation. Contracts and documented specifications exist only to guide the parties involved in the event that something goes bad and the trust is lost. It is immature to expect that harsh contract terms ensure successful outcomes – in reality it just ensures more pain in the event of failure. The success of a relationship between strategic supplier and customer must first be built upon the thinnest membrane of trust, which in the early stages is hoped for, or at best assumed. However if properly managed and cultivated, with layer upon layer of reliable deliveries, kept promises and customer service led re-enforcement, it is extraordinary how strong that foundation can become.

But which part of the organisation is responsible for generating and maintaining this trust? Well the sales and account management guys must be responsible for planting the first seeds from which the relationship will grow. Industry and product knowledge are key to building the respect and confidence required to make the sale. If they can't build that first layer, then it's game over before it's even started, which is why they earn the big bucks. The product or service offering must obviously be up to scratch, it helps if the delivery team knows what they are doing and the helpdesk or support function must be professional and responsive.

The weakness of many IT solution and service providers in this, and many other industries, is that they don't have these 'touch points' aligned. Each point of contact with the customer is an opportunity to convey the merits of your organisation, re-state your proposition, re-emphasise your corporate promise and re-enforce your brand values, ensuring the customer still believes. Just like the bubble, the belief has to be intact across the full sphere. If the product is great, but the support leaves the customer feeling exposed, or if the salesperson tells a different story to the consultant, then the whole bubble is fatally compromised.

These events are borne of a failure to ensure that the proposition is well considered and that every aspect of the delivery is linked, coordinated, and consistent with the others. This ensures that there is integrity throughout every step of the customer experience. It sounds simple enough, but only when analysing this in detail do we find the key to creating, selecting or directing the right individual pieces to make up the whole. It is the correct alignment of the small cogs within the larger cogs. Only when the customer sees that the proposition is designed and executed as a working whole does the trust flow freely enough for optimal operation.

ABOUT THE AUTHOR

Gary Strickland-Clark is head of marketing for banking and insurance at TietoEnator.