There's no reliable way to work out who you can trust - so we're building one

It’s 13 years ago this month since I first started working on the idea of Fairer Finance. Back then, comparison sites were coming to maturity, and it struck me that as more and more consumers bought insurance and banking products through these platforms, the more need there was for better information to help them understand quality. The ratings I built were designed to be a short cut to helping them see which companies were likely to offer the best experience, and which products were the most comprehensive (or in the case of banking and investments, the cheapest).

I’ve always been clear eyed about the limitations of ratings. In fact, one of my favourite phrases – that I’ve often said to prospective clients – is that “all ratings are wrong, some ratings are useful”. And while I do think there’s value in the ratings that we produce, I’m also the first to admit that they’re not perfect.

Ratings are an assembly of data – data which looks at firms from the outside in. But the real story can be hard to reach with what’s only available from the outside. You can poll customers – but in financial services, even if you manage to reach real customers and skip round the bots that are increasingly infiltrating online polling panels, they are not always the best arbiters of whether they are getting a good deal. Many customers are blissfully ignorant, and others simply haven’t yet experienced some of the pain points that exist in the system.

You can get to some of this through mystery shopping. But you can’t mystery shop insurance claims. And you can’t take out every credit product on the market.

Four ratings, four different stories

But every firm is desperate to prove that they are trustworthy – and they are right to be. Review sites like Trustpilot and Smart Money People have become some of the most popular proof points for firms in recent years. But it’s very hard to create a review platform that builds in a true picture of customers’ experience. Firms naturally do their best to fill the funnel with positive reviews – and most people are pre-disposed to be nice when they’re prompted to give a review. If a customer is ranting and raving at you in a bank branch, it’s not exactly the best moment to ask them to leave a review.

So as a result, almost all firms who engage with these review sites get scores of between 4 and 5 stars – and the ones who get closest to 5 are often the ones who are playing the game the hardest (not the ones with the best service).

In short, if you really want to know which firms are truly trustworthy – there’s no completely reliable way to find out.

A couple of weeks ago, I was chatting to Danske Bank – a Danish bank that is one of the largest banks in Northern Ireland. They mentioned that they receive a Which? recommended provider award in bank accounts. I took a look at our customer experience ratings, and they come 16th out of 23. What do other sites say? Trustpilot gives them a score of 2.1 out of 5 – which means they obviously don’t play the Trustpilot game. And Smart Money People puts them with a middling score of 3.79. Who’s right? Well – there’s some truth in all these ratings – but they all work in different ways. To understand what they mean, you have to understand the underlying methodology. But when that complexity gets crunched down to a score of 1 to 5, or a percentage, those nuances are not always obvious.

Firms obviously want to put their best foot forward when they talk about their reputation. So if you’re Danske Bank, you’re going to be shouting about your Which? rating and not mentioning the others. But as AI starts to change the way that consumers buy financial services products, it will be harder for firms to hide behind a veil of respectability. AI will look at all the data available and draw its own conclusions. No disrespect to Danske by the way - the truth is surely somewhere in the middle of all these scores - there's some good and some areas where they have work to do. But depending on which source consumers use - they may come to the conclusion that Danske is brilliant or terrible - when it's neither.

A new partnership

That’s why this week, we’ve launched a partnership with a new company called Sideways. Together, we’re planning to work with firms to diagnose where trust is leaking, design and build to repair those problems – and help companies prove their trustworthiness to existing and prospective customers through a new accreditation. Think of it as the Michelin stars of financial services (although it definitely won’t be based around stars – there are already far too many of those in the market!).

Sideways was founded by Daljit Singh – who set up one of the first digital design agencies (Digit) back in the 90s. More recently, he was one of the founders of ANNA Money. His collaborators are Nicolas Roope and Andrew Beckely – both with impressive CVs in the design and development industries.

Together, we are able to go much further than Fairer Finance has managed in our previous consultancy engagements with clients. In the past, we would tell companies what they needed to do – but we didn’t have the breadth of skills to help them with any of the design and build. With Sideways, we’re able to diagnose where firms sit today, tell them where they need to improve and them help them deliver solutions at speed, whether that’s improving journeys or building new ones, leveraging AI to simplify internal processes, or delivering workarounds to legacy technology.

Built around Consumer Duty

Our accreditation is built around the core planks of the Consumer Duty – so as well as providing an external proof point of credibility, it will help meet firms’ internal Consumer Duty reporting requirements.

Consumer Duty sets a bar well above where many firms are operating today. But no one has yet defined what that high bar looks like. That’s what our accreditation will do. We would not expect any firms to hit the top tier in the next year or so – but the bottom rung will be achievable for firms who are committed to delivering good outcomes. To achieve that level, firms will need to have identified their gaps and have a plan to close them – whilst mitigating any major harms. That's already a step ahead of most firms in the market.

To reach the top tier, firms will need to have embedded the full letter and spirit of the Duty.

We’ll be carrying out the assessments at product level - whilst also providing firms a route to achieve a whole company accreditation where they meet the high standards across all elements of their business.

Not everyone will want to participate because it will be exposing. But when we formally launch the detail of the accreditation in the next few months – we will be unveiling a series of launch partners – which will include both small building societies through to multinational banks and insurers. Over time, we hope that our accreditation will become the go to mark of quality in the sector, and stimulate real competition on service and good customer outcomes.

If you’d like to be part of our work, or hear more – drop me a line. We’ll have more details to share publicly in a few weeks.