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One-Third Of Households Don’t Trust Their Financial Services Providers
22 Jul
When it comes to security concerns, trusting your financial services institution is key. But many Americans don’t have much faith in their banks or other financial providers, according to a recent survey by Market Strategies.

The survey showed that 31% of American households are doing businesses with a bank or other financial company they don’t fully trust.

Financial services covered include banking, credit cards, home mortgages, investment services, auto, home, and life insurance. Levels of trust varied according to service category. For example, only 12% of respondents said they don’t trust their banks, compared with 24% of folks who are wary of their mortgage lenders.

“Significant financial implications” for lack of trust

Jeremy Bowler, senior vice president of financial services at Market Strategies, said the lack of trust among customers has an influence on society as a whole. “It creates greater opportunity for disruptive change, and with financial technology solutions rapidly emerging, this is a pool of consumers who are ripe for the picking.”

Insurance providers seemed to engender more trust in their customers than mortgage service providers. That may be because people don’t file insurance claims as often as they pay their mortgages, resulting in less contact with the companies.

Credit card issuers and banks also need their customers to trust them, since the security of their accounts is at stake and can have a significant impact on their financial standing.

Age makes a difference in trust levels

Older folks tend to be more trusting of their financial institutions than younger ones do. This is surprising partly because younger folks are generally more comfortable with new technology like digital wallets and online account management. But according to this survey, people over 55 were the most trusting, while those under 35 were more skeptical.

However, folks under 35—the Millennial generation—are still pretty trusting. Sixty-nine percent of them said they trust all of the institutions that provide their financial services.

Factors that influence trust include service quality and consistency, as well as communication. Clear communication and end-of-year statements helped people feel more secure about the companies that handle their money.

Methodology

The study was conducted among a sample of 1,056 folks ages 18 and older, at the end of April 2016. Interviews were conducted online, and respondents had to confirm that they were either primarily responsible for household financial decisions, or partially responsible for them. The opt-in nature of the survey did not yield a random sample, so there is no accurate margin of error.

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