Who would you trust to give you a business loan, who would you trust with your savings and investments? Trust is at the root of most business funding, especially peer to business (P2B) lending so what do you expect from financial brands, and what makes you trust them? Read our thoughts about trust and then join our conversation to help shape the future of financial services.
A recent survey revealed that we typically trust financial advisors more than we do our accountants, or even our doctors. Then I read an article in the Economist that suggested that our need for financial advice might actually be psychological rather than rooted in rational decision making at all.
Their argument, for what it’s worth, is that history shows that it’s impossible to accurately predict what will happen to financial markets. It’s the same when political forecasters predict events – or the weather man tells us it will be sunny (or more likely, rain) tomorrow. We know that they don’t have a crystal ball and – if we’re honest – we know that they’re often wrong, but our need for advice wins through, keeping us glued to our screens – and financial advisers.
Psychologists think it has something to do with the “avoidance of regret”. We seek advice so that, if the worst happens and things do go wrong, we have someone else to share the blame with.
Of course, there is also a lot of genuine complexity in financial products that needs explaining, and that’s another – highly sensible – reason that people consult an advisor.
Christine Ennew is a professor of marketing at Nottingham University and has been working on trust in financial services for almost nine years. Writing in FT advisor, she explained that trust in the financial sense is about giving someone the use of your money in the belief that they will return it to you, along with a reasonable payment for ‘using’ it.
Sounds straightforward, but how do you judge who and what to trust? Financial products often can’t be judged until there is performance data to check; even then, performance of one product is caught up in the performance of the economy – the world, even – at large.
Then, there’s the issue of the changing way that money is lent and borrowed in this country. Traditional ‘bank managers’, who typically earned very high levels of trust, have been replaced by computers, systems and the web – and online brands have to work harder to gain trust.
Why am I telling you all this. Well, because “trust” is a concept we spend a lot of time thinking about at FundingKnight. We’re trying to combine some of the lost benefits – and trust – of traditional banking whilst benefitting from the speed and efficiency of the internet.
We have some ideas about how to demonstrate that we’re worthy of your trust, but we’d also love to hear your thoughts.
How do you decide which financial organisations to trust? What would help you decide to invest in a business? Do you trust local businesses more than national ones because you ‘know the market’ or do you prefer to trust advice and invest “automatically” to benefit from that idea of the “avoidance of regret” that I mentioned at the start of this post.
We think it’s a really interesting topic and just one of the issues that is changing financial services in the UK. FundingKnight wants peer to business lending to lead that change, and push for innovative solutions that benefit everyone and so we’d love to hear what you’ve got to say.
After all, this isn’t about you and us, it’s about all of us finding a new way to work that is better for everyone.
Leave us a comment in the box below, write a response on your own blog and link back to us here or connect with us on Twitter or Facebook. We don’t mind how you do it, but please do join the conversation – it’s your future, too, help to shape it.
Photo used under creative commons license