Consumer trust in banking relationships in Europe

Abstract

Purpose – The purpose of this paper is to examine the content of consumer trust in the banking sector on the basis of the earlier literature and to compare consumer trust in banking and distinct banking services in 29 European countries in order to find out if there are deviations in consumer trust in banks at the organisational level, and at a service level, and between distinct services and between various countries. Design/methodology/approach – The study employs a survey gathered in 2012 in 29 European countries containing 41,308 consumer assessments concerning banking services. The data are analysed by using SPSS-statistical software. Findings – The study reveals deviations between various banking services and company-level results regarding consumers’ trust in their banking relationships. Consumer trust is the highest in banking accounts and the lowest in investments and pensions. The study also highlights deviations in consumer trust between European countries, and identifies countries with low, medium and high trust in banking and in distinct banking services. Research limitations/implications – The culture and well-being of a nation may affect in consumer trust in general. The data are bound to certain limitations, its formula is decided at European Commission level. Practical implications – Low trust may indicate serious problems in the markets and it should be a signal to bank managers to take actions, e.g. by reducing the levels of perceived risk in high-complexity banking services, launching simpler products, present service offerings in a more customer-oriented way, applying behavioural perspectives in relationships with consumers, encourage on-going behavioural loyalty, and maintaining customer service at high priority. Low-trust consumers have to be approached with a different strategy than those with high trust. Originality/value – The paper contributes to the literature on trust by defining the content of consumer trust in the banking context. The empirical results of consumer trust in banking in 29 European markets at country level and at banking service level increase knowledge of trust as experienced by consumers. They reveal that trust is a service-specific phenomenon showing that the degree of consumer trust varies depending on the service in question, and there is vast deviation between the European countries. The highest trust in all the three banking services is experienced in Malta, Finland and Luxembourg, and the lowest in Spain. Otherwise the countries show variation across the banking services. The results indicate also demographic deviations in trust.