A question of trust

July 13, 2007

Credit card firms and life insurance companies are the least trusted of all financial bodies in the UK, according to a unique new 'Trust Index' developed at The University of Nottingham by the Financial Services Research Forum.

The index, a wholly new approach to the measurement of trust among the general public, shows that brokers and advisers are the most trusted, followed by building societies, then banks, then investment companies.

At the bottom of the Index, credit card firms and life insurance companies received the lowest ratings of all the financial services institutions (FSIs), when more than 2,800 interviews were conducted with members of the public about their perceptions of the bodies they deal with on a day-to-day basis.

The Trust Index has been developed to monitor levels of consumer trust in the industry -- against a background of increasing concern about declining levels of consumer trust in financial services, perceived industry malpractice such as mis-selling of pensions and endowments, and the impact of recent stock market difficulties.

Media coverage of the financial services sector frequently highlights poor relationships between customers and FSIs, which in many cases appear to be underpinned by a lack of trust.

Professor Christine Ennew, of Nottingham University Business School, has led work on the Trust Index funded by the Financial Services Research Forum, which is based at the University and is the only independent university-based academic Forum which brings together and actively networks a large sample of the major retailers of financial services, supplier companies and consumer interest groups.

Professor Ennew said: "Trust and trustworthiness are at the heart of any exchange relationship and nowhere is this more apparent than in financial services.

"Intangibility, product complexity, the long-term nature of many products and the importance of financial assets in relation to individual well-being mean that customers experience high levels of risk when making purchase decisions. They typically lack specialist knowledge and may have difficulty in judging product performance. The costs of making a mistake are considerable.

"Faced with such risk and uncertainty, many customers are dependent on financial services institutions (FSIs) to offer products of an appropriate type and quality -- and must trust them to do so.

"However, there is growing concern about the extent to which FSIs are trustworthy and the extent to which consumers trust them."

The Trust Index was set up to look at the issue in far greater depth than has ever been done before. Previous surveys of the sector have been limited in their design -- often being limited to simple yes/no answers.

But the Trust Index broadens this out to give a uniquely detailed analysis, by looking at how customers rated FSIs on two levels: The result is a new insight into how key determinants of the quality of customer relationships are changing, as well as an aid to understanding the factors that determine them.

The findings of the Trust Index indicate, for example, that many FSIs get their highest customer ratings in relation to ability and expertise in their field -- ie. in the area of 'low-level' trust. But they find it much harder to present themselves to customers in terms of 'higher level' trust, particularly in relation to shared values.

In other words, while many customers might trust their building society to operate effectively in its sector, fewer feel that it has their interests at heart.

Organisational trustworthiness, which is defined as the extent to which customers perceive that an FSI is worthy of their trust, is determined by communications, shared values, integrity, ability/expertise and benevolence.

The Trust Index also complements the ongoing concerns of the Financial Services Authority (FSA), about 'Treating Customers Fairly', which reflects the inherent link between fairness and trust.

As part of the study, FSIs were compared with other major institutions, which yielded some surprising results. This part of the exercise found that the level of trust in FSIs was in fact rather better than for bodies such as the BBC, the NHS and major high-street supermarkets chains.

Interestingly, the study also found that levels of trust in the BBC and NHS have dropped noticeably between 2006 and 2007, while levels of trust in FSIs have remained fairly consistent.

Professor Ennew concluded that overall levels of trust in FSIs were in fact 'surprisingly high' when considered in relation to existing anecdotal evidence, although it did vary between different types of institution.

However, the analysis by age suggests this position might be vulnerable in the longer term - because the younger the customer, the less trusting they were.

Professor Ennew said: "Those under 55 show significantly lower degrees of trust in FSIs, perhaps reflecting different experiences of the financial services sector. This is suggestive of a significant challenge for FSIs in the future management of their relationships with customers outside this age group."
-end-
Notes to editors: The University of Nottingham is Britain's University of the Year (The Times Higher Awards 2006). It undertakes world-changing research, provides innovative teaching and a student experience of the highest quality. Ranked by Newsweek in the world's Top 75 universities, its academics have won two Nobel Prizes since 2003. The University is an international institution with campuses in the United Kingdom, Malaysia and China.

The Financial Services Research Forum is an independent, non-profit organisation based at Nottingham University Business School. The Forum brings together leading financial services organisations and academics to engender top-quality, cutting-edge research in the area of financial services strategy and management. The Forum enjoys the support of a wide range of financial services organisations. It is a unique form of university/business collaboration which brings together and actively networks a large sample of the major retailers of financial services, supplier companies and consumer interest groups, including Abbey, Alliance and Leicester, The Financial Services Authority, HM Treasury, HSBC, Joseph Rowntree Foundation, Lloyds TSB and Scottish Equitable.

More information is available from Professor Christine Ennew, Nottingham University Business School, on +44 (0)115 951 5259, Christine.ennew@nottingham.ac.uk; or Media Relations Manager Tim Utton in the University's Media and Public Relations Office on +44 (0)115 846 8092, tim.utton@nottingham.ac.uk

University of Nottingham

Related Relationships Articles from Brightsurf:

Gorilla relationships limited in large groups
Mountain gorillas that live in oversized groups may have to limit the number of strong social relationships they form, new research suggests.

Electronic surveillance in couple relationships
Impaired intimacy, satisfaction, and infidelity in a romantic relationship can fuel Interpersonal Electronic Surveillance (IES).

'Feeling obligated' can impact relationships during social distancing
In a time where many are practicing 'social distancing' from the outside world, people are relying on their immediate social circles more than usual.

We can make predictions about relationships - but is this necessary?
'Predictions as to the longevity of a relationship are definitely possible,' says Dr Christine Finn from the University of Jena.

Disruptions of salesperson-customer relationships. Is that always bad?
Implications from sales relationship disruptions are intricate and can be revitalizing.

Do open relationships really work?
Open relationships typically describe couples in which the partners have agreed on sexual activity with someone other than their primary romantic partner, while maintaining the couple bond.

The 7 types of sugar daddy relationships
University of Colorado Denver researcher looks inside 48 sugar daddy relationships to better understand the different types of dynamics, break down the typical stereotype(s) and better understand how these relationships work in the United States.

Positive relationships boost self-esteem, and vice versa
Does having close friends boost your self-esteem, or does having high self-esteem influence the quality of your friendships?

Strong family relationships may help with asthma outcomes for children
Positive family relationships might help youth to maintain good asthma management behaviors even in the face of difficult neighborhood conditions, according to a new Northwestern University study.

In romantic relationships, people do indeed have a 'type'
Researchers at the University of Toronto show that people do indeed have a 'type' when it comes to dating, and that despite best intentions to date outside that type -- for example, after a bad relationship -- some will gravitate to similar partners.

Read More: Relationships News and Relationships Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.