Last November, Gallup found that only 15% of Americans had "a great deal" or "quite a lot" of confidence in the U.S. banking system. That's a new low. This is a problem not only for the financial industry generally but for individual banks too. That's because people who lack confidence in their bank may be less loyal -- and they may be more likely to leave it and go elsewhere.
Bankers may think they aren't doing anything wrong; they're just trying to provide a return for shareholders. So from their perspective, they're doing the right things. In that case, why are customers reacting so strongly? Because bankers are also doing things like overtly passing on costs in the form of fees, which infuriates the customers who are expected to pay them. And bankers are also making cuts in customer service, which not only angers customers, but it basically encourages them to walk out the door.
It doesn't have to be this way. As Gallup Chief Economist Dennis Jacobe, Ph.D., discusses in the following conversation, there are ways to do the right thing, both by the bank's P&L sheet and by its customers. But banks need a more educated view of customers and their own place in the consumer economy. In short, Jacobe says, they need to "think behavioral economics."
Read the Q&A here.