The results of the Deloitte Trust Index 2018 on banking indicate where to focus the need for urgent action to repair consumer sentiment towards banks. This is particularly valuable given that culture and conduct will both get a very hard edge in the strengthened regulatory environment mooted by Commissioner Hayne, as he signals a greater role for the judiciary in ensuring accountability for significant and systemic poor conduct. Being trusted becomes even more critical in an open banking environment where banks will have to contend with the possibility of losing customers to more trusted competitors, as the barriers to exit continue to fall and new entrants join the road to open banking. While there is no indication that consumers do not trust banks to keep their money safe, trustworthiness is expected to play a greater role in shaping consumer choices about where and with whom to bank. Money is most likely to flow towards those perceived to be the most able to keep their promises. The Deloitte Trust Index on banking gives us a clear message as well as cause for optimism. It identifies the pain points and so where the practical ways to recapture trust lie. This needs bold action and confidence. This is probably the biggest danger in a post Hayne world – a loss of confidence among bankers. This is likely to lead to inertia. This would have significant implications for the economy and welfare of Australians if fast, safe decision-making by bankers falls victim to fearful inertia. To overcome inertia, it is important to accept the current circumstances and commit to change. For example, in the responsible lending space, this means embracing a world without standardised expense benchmarks. Those that do so quickly and effectively will prosper. Yet, bold action is fine and well, but without evidence of what to prioritise, and its impact, it may just be a ‘band aid’. Until now, there has been limited research to indicate exactly what to do and how to optimise efforts at re-capturing trust. The Deloitte Trust Index on banking does give us clear and insightful findings on these priorities, some, but not all of which we detail here. Trust is the outcome of promises fulfilled and the Deloitte Trustworthiness Model identifies three key factors affecting the ability to keep promises. Your intent to keep your promises – which can be associated with a mindset of keeping promises, your technical capabilities, and the alignment of your products and services with customer interests. The Model in its entirety, and a promise keeping mindset, in particular, represents an evolution of ethics in business into a practical and explicit conversation about whether organisations truly set out to keep its promises, always. What provides practical impact is to focus on the conditions, which enable you to keep your promises – your trustworthiness, as the key to ensuring consistently suitable and fair conduct. The findings of the Index indicate that the greatest driver of perceptions of trustworthiness among bank consumers is a mindset of consistently keeping promises. Capability and alignment certainly matter, but in the absence of such a mindset, technology, and product innovation and change, while obviously necessary for other reasons, will be limited in their ability to demonstrate trustworthiness. Being bold is not about being revolutionary, but about going back to first principles of banking, as a trustworthy business grounded in a clear commitment to keeping promises. Banks have challenges here, as their complexity means that few banks actually know all the promises they make, explicitly, and implicitly, and which people, processes or technologies determine their ability to keep such promises. It would make sense, in order to predict threats to trustworthiness, to be able to measure, not only consumer perceptions, but also employee perceptions of the ability to keep promises. In addition, an inventory of all promises made, with a monitoring and supervision model that manages and oversees the ability to keep them will greatly enhance proactive risk management. As Commissioner Hayne has demonstrated, compliance related controls of non-financial risks have been ineffective, so there is certainly space for operating model enhancement and change. Compliance is an outcome, not a goal. The goal is to keep your promises – compliance is the outcome. In uncertain times, few regulators can argue with basing controls on promises and the ability to keep them, instead of building controls based on often highly complex legalistic interpretations of regulatory risk. The opportunity We are very optimistic and believe significant change is beginning to rebuild trust. By focusing on trustworthiness and shifting from a defensive mindset, to one that prioritises the business opportunities associated with the management of promises, the keys to a world where the bold can prosper are there for the taking. Click here to download the results of the Deloitte Trust Index – Banking 2018. Willem Punt, Deloitte Partner, Conduct, Governance & Compliance has 17 years of experience in designing, managing and evaluating conduct in and for financial institutions in Australia and aboard. He specialises in trust management and preventative conduct frameworks. This article was first published in the Australian Financial Review October 2018.