PREDICTING THE LEVEL OF BANKS� CUSTOMER TRUST FOLLOWING A BANKING CRISIS

Abstract

ABSTRACT In October 2008 three of the biggest banks in Iceland collapsed along with the biggest savings and loans. Customer trust towards the banks was lost. This paper deals with the research questions, “Which factors predict the level of banks´ customer trust following a banking crisis?” and “Which factor is the most important in predicting the level of banks´ customer trust following a banking crisis? The methodology is quantitative, in the form of a survey. The population of interest was customers of the Icelandic banks. A convenience sample was used. The findings show that six factors explain 76.7% of the variability in trust. The factor that is most important in predicting the level of banks´ customer trust is how well they thought they could rely on the banks to meet their expectations. Keywords Customer trust; Regression analysis; Banks; Banking crisis