Friday 21 June 2024

Lex Suvanto

Public trust in financial services sector ‘highest’: Edelman

NEW YORK, May 14, 2024

The global public’s trust in the financial services sector has reached its highest level since 2012, according to the 2024 Edelman Trust Barometer Supplemental Report: Insights for the Financial Services Sector. 
The research showed that 62% of respondents trust financial services companies to “do the right thing,” a 4 point increase from last year and, for the first time, narrowly earning the industry a rank in the “Trusted” category (60% or more).  
Globally, trust in the financial services sector now ranks at an all-time high in just over half of the countries surveyed, half of which are categorised as developing markets. 
Creating stronger financial systems
“While financial services has made great strides in trust levels over the last decade, the industry still has a long way to go to reach solid footing in trusted territory,“ said Lex Suvanto, CEO, Edelman Smithfield. “To do so will require companies to execute trust building communications strategies about how they are improving financial well-being and creating stronger financial systems, and ensure that is effectively conveyed to their key stakeholders.” 
The research uncovers a divide between developing and developed markets’ views on the financial services industry. Highlights include:
•Trust levels are at their highest in countries such as India (83%) and Thailand (81%). 
•Nigeria and Colombia saw double-digit growth in levels of trust since last year. 
•Financial services companies are still distrusted in the majority of the G7 countries. Trust levels under 50% represent distrust. 
•Financial services scored below that level in Germany (41%), Spain (41%), France (45%), Japan (47%), Italy (44%) and the UK (49%). 
•Financial services is in the “Neutral” category in North America – US (55%) and Canada (59%). 
The difference in trust in financial services between developing and developed markets can be attributed to individual experiences, accessibility to products, and the industry's capacity to improve business and individual lives within each local context. 
Rapid innovation
In developing nations, the majority of the population often depends more on traditional banking services and values trusted relationships due to the limited availability of advanced products and technologies. Conversely, in developed countries, trust expectations are higher, fuelled by rapid innovation in new products as well as a growing demand for convenience and efficiency. 
Citizens in developed countries are often more focused on industry complexities and scandals that could potentially impact trust levels negatively. 
Now in its 24th year and the most-cited source of information on the topic of trust in institutions, the Edelman Trust Barometer polls more than 32,000 people in 28 countries. The Financial Services Insights of the Barometer examines what people think about the companies they rely on, work for, and entrust with their money. Banking is the most trusted financial services sub-sector globally 
While levels of trust increased among all financial services sub-sectors, banks have seen one of the biggest shifts (+4 points year over year (YOY)) and now have a trust score of 66%. Banks are trusted in 16 of the 28 countries and consistently trusted regardless of age, income or gender. Over the past decade, trust in banks has jumped 12 points. 
Insurers have also moved into the trusted category this year: the scores for personal insurance and property/casual insurance rose by 2 points to 62%, and by 4 points to 60%, respectively. Investment management remains in the “Neutral” category, but has seen a 4-point uptick in Trust YOY. At the lower end of trust: cryptocurrency/digital assets; the sub-sector remains firmly within the “Distrusted” category with a score of 38%. 
Other Key Findings
•High-income individuals are 12 points more trusting in the financial services sector than their lower-income counterparts. Over the past 10 years, Trust has grown twice as much among high-income individuals as low-income individuals.  
•Women now trust financial services companies, with a score of 60% after a 4-point increase YOY. However, they are still less trusting than men, whose trust in the sector is at 63%.
•Younger generations have greater levels of trust in financial services than older respondents; individuals in the 18-34 age bracket are 9 points more trusting than those aged 55+.  
•Despite a 4-point increase YOY, the investment management sub-sector remains in the “Neutral” category at 54%. 
•Higher trust levels can be seen in the Middle East, Africa and Asia, yet trust challenges remain in major European economies such as France (29% trust; -5pts YOY), Germany (34%; 0pts YOY), UK (37%; -3pts YOY) and Italy (45%; +6pts YOY). 
•Employees in the financial services sector are the second-most trusting of their employers; 84% trust their employer to do what is right. 
•Business remains the only trusted institution (63%), in comparison to NGOs (59%), government (51%) and media (50%), and is seen as more competent and more ethical than government and media.--TradeArabia News Service


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