18 May 2009 11:53:00.000
Despite the global recession and the crisis in the banking sector, consumer confidence in financial services remains intact, according to a report compiled for the Nottingham University Business School.
The Financial Services Trust Index 2009, by Professor Christine Ennew is based on 1400 consumer interviews and is the first of its kind to look at simple yes and no answers.
Professor Ennew said:”The Index offers a boost to the sector with results showing consumers' trust in financial services is even more than venerable institutions like the BBC and NHS.”
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The index shows an overall trust rating of 75.02 for financial services institutions (FSIs), compared to the NHS and BBC who scored 53 and 61 respectively.
Of the individual sectors brokers/advisors received the highest rating (81.67) with investment companies (76.24), general insurers (75.98) and building societies (75.22) following. Banks scored highly with 73.96 followed by credit card companies (71.55) and life insurance companies (72.69) on the lower end of the scale.
Professor Ennew said: “By employing a strict yes or no answers approach, the Index develops a more complete understanding of consumer trust by looking at base level (cognitive) and high level (affective) trust.”
Base level (cognitive) trust is significantly above high level (affective) trust as might be expected – respondents are more convinced about the reliability/dependability of FSIs and less convinced about the extent to which FSIs have their interests at heart.
Professor Ennew added: “In terms of different types of FSIs, brokers and advisors are seen as the most trustworthy, with credit card companies seen as least trustworthy.
“But evidence showing that a “crisis of trust” does not appear to have arisen out of the current conditions, is not grounds for complacency.
“Behind an overall average that suggests consumes have moderate levels of trust in financial service providers, there is considerable variability. Indeed the evidence suggests that a significant proportion of customers (around 20%) can be characterised a low trust; over-represented in this group are the young, male consumers who use remote channels. And the average industry figures hide a wide disparity in trust for individual institutions within specific sectors.”
Other findings include:
• The ratings for brokers who are independent are higher than for brokers who are tied.
• In terms of the drivers of trust, FSIs attract their highest ratings in relation to ability/expertise and are weakest in relation to shared values, a result which is consistent with findings from previous surveys.
• Older customers in financial services have significantly higher ratings of trust and trustworthiness than younger customers. This suggests that FSIs may face an important challenge in the future in building and maintaining trust among the younger age groups.
• Service failures which result in a complaint have a negative impact in all dimensions of trust. However, successful service recovery as measured by satisfaction with complaint handling, does help to restore consumer trust.
• There continues to be some variability in trust by channel, but what is most noticeable is the apparent decline in levels of trust among those who tend to use the internet and this is particularly marked for banks and credit card providers.
• Comparative analysis with the results of the Trust Index Surveys in 2005, 2006, 2007 and 2008 suggests a high degree of consistency in levels of customer trust in FSIs. Brokers and advisers are consistently the most trusted FSIs although they experience a marginal decline in 2009; life insurers tend to e the least trusted FSIs, along with credit card companies. Banks, Building Societies, general insurers, life insurers and investment companies all experience a slight increase in 2009 while credit card companies deteriorate after an improvement in 2008.
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Notes to editors: The Financial Services Research 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 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.
This group enables the University of Nottingham to conduct long term and leading-edge academic research, from a multi-disciplinary management and organisational perspective.
The University of Nottingham is ranked in the UK's Top 10 and the World's Top 100 universities by the Shanghai Jiao Tong (SJTU) and Times Higher (THE) World University Rankings.
More than 90 per cent of research at The University of Nottingham is of international quality, according to RAE 2008, with almost 60 per cent of all research defined as ‘world-leading’ or ‘internationally excellent’. Research Fortnight analysis of RAE 2008 ranks the University 7th in the UK by research power. In 27 subject areas, the University features in the UK Top Ten, with 14 of those in the Top Five.
The University provides innovative and top quality teaching, undertakes world-changing research, and attracts talented staff and students from 150 nations. Described by The Times as Britain's “only truly global university”, it has invested continuously in award-winning campuses in the United Kingdom, China and Malaysia. Twice since 2003 its research and teaching academics have won Nobel Prizes. The University has won the Queen's Award for Enterprise in both 2006 (International Trade) and 2007 (Innovation — School of Pharmacy), and was named ‘Entrepreneurial University of the Year’ at the Times Higher Education Awards 2008.
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