Release Date: 2008-08-11
Original Link: http://presszoom.com/story_145767.html
Banks and life insurance companies are now the least trusted of all financial institutions � according to a unique 'Trust Index' developed by the Financial Services Research Forum at The University of Nottingham � and the Northern Rock crisis may be to blame for the noticeable fall in consumer trust across the banking industry.
(PressZoom.com) - Banks and life insurance companies are now the least trusted of all financial institutions � according to a unique 'Trust Index' developed by the Financial Services Research Forum at The University of Nottingham � and the Northern Rock crisis may be to blame for the noticeable fall in consumer trust across the banking industry.
This year banks received the lowest rating for having the interests of their customers at heart and the second lowest rating for overall trust.
However, government intervention in the Northern Rock crisis may account for a relatively high rating in 'system trust' � the level of confidence in the regulatory environment and business system that provides protection for consumers.
The Financial Services Trust Index takes a forensically detailed approach to the study of consumer trust in financial services institutions (FSIs). It goes beyond the typical yes/no answers to give a unique insight into consumer trust in and trustworthiness of financial services providers.
The index was developed in 2005 against a background of increasing concern about declining levels of consumer trust in financial services, perceived industry malpractice such as the miss-selling of pensions and endowments and the impact stock market difficulties.
Since the first full survey in 2006 brokers and advisers have consistently rated as the most trusted of all FSIs. This year credit card providers came second � last year they were among the least trusted of UK financial bodies.
Using information collected from over 1200 people in spring 2008 the results are particularly interesting as they capture consumer perceptions in the wake of the Northern Rock crisis and the emergence of a worldwide credit crunch.
Work on the index is funded by the Financial Services Research Forum and led by Professor Christine Ennew, of Nottingham University Business School. Professor Ennew said: �Trust plays a crucial role in the provision of financial services and is fundamental to effective customer relationship management.�
The index explores consumer trust on two levels.
� Low-level trust � relates to the extent to which an organisation can be relied on to do what it says it will do.
� Higher level trust � relates to the extent to which the organisation is concerned about the interests of its customers.
In their third annual full scale study researchers found that consumers are moderately trusting of FSIs. Respondents were rather more convinced about the reliability and dependability of FSIs. However they were slightly less convinced about the extent to which FSIs have their interests at heart.
Researchers suggest that FSIs may need to pay particular attention to the depersonalising of services as the high trust ratings for brokers indicates that customers may still prefer face to face contact and a more personal service.
One of the important challenges facing FSIs is the building and maintaining of trust among younger age groups as respondents under 65 are not convinced they care about their customers.
Professor Ennew said:�Our studies consistently demonstrate that the younger age groups are far less trusting of financial services providers than older customers. Without active management of customer relationships in these target markets, there is a real danger that many financial institutions will be exposed to declining levels of consumer trust in the longer term.�
As part of the survey FSIs are compared with other major institutions and once again the study found that people trust FSIs more than the BBC, the NHS and major high-street supermarket chains. But ratings for the NHS and the BBC are significantly lower than those for supermarkets and mobile
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Notes to Editors: The University of Nottingham is ranked in the UK's Top 10 and the World's Top 70 universities by the Shanghai Jiao Tong (SJTU) and Times Higher (THES) World University Rankings.
It 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).
Its students are much in demand from 'blue-chip' employers. Winners of Students in Free Enterprise for four years in succession, and current holder of UK Graduate of the Year, they are accomplished artists, scientists, engineers, entrepreneurs, innovators and fundraisers. Nottingham graduates consistently excel in business, the media, the arts and sport. Undergraduate and postgraduate degree completion rates are amongst the highest in the United Kingdom.
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 on +44 (0)115 951 5259, christine.ennew@nottingham.ac.uk or Media Relations Manager Lindsay Brooke in the University's Communications Office on +44 (0)115 9515751, lindsay.brooke@nottingham.ac.uk