By Liza Williams – head of growth intelligence editorial and product, The Growth Distillery
The financial services sector is undergoing a dramatic shift. Traditional models of influence built on authority are rapidly losing relevance, in a world where information is at the fingertips of everyone with access to the internet and institutional distrust is at an all-time high. Affinity – grounded in empathy and relatability – is emerging as the most potent force shaping financial decision-making. Understanding this opens up a huge opportunity for brands in this sector.
The latest instalment of The Growth Distillery’s Influence Codes series, in partnership with Kantar and Ogilvy, paints a striking picture of a financial services sector in transition. Consumers are grappling with rising living costs and economic uncertainty, and their confidence in financial institutions is falling. The statistics are sobering:
• 72% feel pessimistic about their financial future.
• 70% struggle to afford basic necessities.
• 67% of Australians lack confidence in understanding financial terms.
• 52% express distrust in financial institutions.
Against this backdrop, the traditional top-down influence models, where financial institutions influenced decisions with authority and experience, have become less effective. Consumers are seeking more control and turning to sources that feel more personal, aligned with their lived experiences and they believe are truly on their side.
Affinity: The Key to Influence
41% of Australians now say friends and family are their primary source of financial guidance. This growing reliance on proximate and personal connections shows us there is a deep desire for relatability and trust, which they are not getting elsewhere. However, while friends and family provide comfort and relatability, they lack the expertise needed to navigate increasingly complex financial decisions. One in two Australians failed our financial literacy test and 80% do not consider themselves very knowledgeable about financial terms and concepts. And so we find ourselves in an influence vacuum, which poses both a challenge and an opportunity for financial brands.
Here’s where Affinity comes into play. The Influence Codes shows that Affinity has now overtaken Authority as the most powerful driver of influence more broadly, but interestingly, this is particularly true in Finance, where the decisions are more high risk and complex than other sectors.
Yet, expertise and information remain critical for important decisions like budgeting, credit cards, and investments. The challenge for financial brands is to integrate these elements seamlessly into a framework that prioritises empathy for their customers and relatability. Re-establishing themselves as trusted partners by balancing relatability with the expertise and authority they’ve historically been known for. After all, only 28% of Australians feel confident making such decisions, underscoring the need for clear, accessible guidance.
A Call to Action for Financial Brands
The findings from this research are a wake-up call for the financial sector. Brands that fail to adapt, risk losing relevance in a world where consumers are redefining how they seek and experience influence. Those that embrace Affinity, however, have an unparalleled opportunity to rebuild trust, bridge the financial literacy gap, and become indispensable partners in their customers’ financial journeys.
But time is of the essence. The cost-of-living crisis has heightened the urgency for meaningful solutions. Consumers are increasingly selective about where they place their trust, and only those brands that demonstrate empathy and deliver real value will succeed.
To thrive in this new era of influence, financial brands must:
• Be Generous And Selfless. Character is the most important factor in Affinity, so being generous and selfless will signal approachability and trust.
• Demonstrate Understanding Context. Given financial decisions are highly personal, making the customer feel they and their context are central to the decision is vital.
• Convert Information Into Options. With low rates of financial literacy, reducing complexity by providing comparative options will reduce overwhelm and information overload.
• Be Experts By Experience. Authority is still vital in these decisions but showing how that expertise is relevant will make it more compelling for your audience.
This is not just a shift in strategy; it is a shift in mindset. Affinity is not about abandoning Authority, but enhancing it with empathy. Over time it has become clearer that the success of the financial sector will depend on its ability to connect with consumers in a way that feels authentic, personal, and empowering. The era of Affinity is here, and those who embrace it will become an indispensable partner in their customers’ success.