Semenog Andrii, Ph.D. in Economics, Associate Professor, Associate Professor of Finance, Banking and Insurance Department, Sumy State University, Sumy, Ukraine

ORCID ID: 0000-0003-3222-9574

Brychko Maryna, Ph.D. in Economics, Senior Lecturer of Finance, Banking and Insurance Department, Sumy State University, Sumy, Ukraine

ORCID ID: 0000-0002-9351-3280
e-mail: m.brychko@uabs.sumdu.edu.ua

Semenog Viktoriia, Master of Economics, Sumy State University, Sumy, Ukraine

e-mail: vikasemenog@gmail.com

Scientific and Methodological Approaches to Assessing the Level of Consumer Trust in the Banking Market of Ukraine

Abstract. Introduction. The capitalist way of society’s development involves a constant search for the development of effective forms and principles of the relations between different economic entities: entrepreneurs, employees, government, real and financial representatives. The basis of this process is the existence of trust as a key element for making a business project investment decision, hiring a new employee, paying taxes, receiving a loan or opening a deposit account at a bank. Trust in the information society becomes one of the most valuable assets of the company. To form and maintain trust is a priority task for the successful development of an individual enterprise and the state. In addition, trust is especially important for banking services market representatives, which are responsible for the preservation and transformation of financial resources within the economic system, ensure the uninterrupted development of the country’s economy. All this emphasizes the issue of analyzing the level of trust to financial institutions’ activities in society.

Purpose. The purpose of the article is to systematize the modern research to determine consumer trust in the banking market and the development of scientific and methodological approaches to its assessment.

Results. The essence and conceptual approaches to the interpretation of trust in the market of banking services on the basis of scientific works of foreign researchers were analyzed. The level of consumer trust and the main factors that determined it, such as the presence of formal institutions, social and economic disparity, the level of wealth and income in the country were described. The key determinants of institutional trust to financial institutions, among which competence, transparency, and integrity were also identified. Based on the scientific sources synthesis, it was determined that the consumer trust to a certain financial institution is an integrated concept that covers such components as a corporate image (brand), confidence to trust, dispositional trust, institutional trust, intention to trust, technological level of financial institution. On this basis, it was developed and conducted a survey that revealed that the technological and digital products of the bank are the most trusted factors for consumers. At the same time, it was established that consumers of banking services, in general, evaluating positively the level of trust in their bank, do not trust the financial and banking system. The scientific and methodical approach to the integrated assessment of consumer trust to the banking institutions was demonstrated. Based on the multicriterial analytical convolution of the dynamics of individuals’ deposits, a number of accounts, cashless transactions, and inflation it was found that the listed indicators, besides the inflation rate, have a positive effect on the growth of trust to banks. It was established that during 2000-2017 the consumers’ trust to banks grew by 12% per year, and in general, increased by 5 times.

Conclusions. Consequently, suggested approaches allow monitoring the propensity of households to save, determine the level of their trust to the banking institutions and their ability to perform the transformation of savings into investments.

Keywords: trust; financial institution; bank; financial services market; banking services market.

References:

1. Skrypkyna, T. P. (2000). Psykholohyia doveryia. Moskva [in Russian].
2. Shtompka, P. (2006). Doverye v epokhu hlobalyzatsyyiu. Sotsyalnaia polytyka y sotsyolohyia, 4, 8–15 [in Russian].
3. Borum R. (2010). The science of interpersonal trust. The MITRE Corporation. McLean, VA.
4. Roy, S. K., Devlin, J. F., Sekhon, H. (2015). The impact of fairness on trustworthiness and trust in banking. Journal of Marketing Management, 31(9-10), 996-1017. https://doi.org/10.1080/0267257X.2015.1036101.
5. Simpson, J. A. (2007). Foundations of interpersonal trust. New York: Guilford, 2007.
6. Hurley, R. F. (2012). A systems approach to restoring trust in the financial markets. EIASM (European Insititute for Advanced Studies in Management), 5th Workshop on Trust within and between Organizations. Madrid, May 28-29.
7. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., Vishny, R. (1997). Legal determinants of external finance. Journal of Finance, 52, 1131-1150.
8. Llewellyn, D. T. Trust and confidence in financial services: a strategic challenge. Journal of Financial Regulation and Compliance, 13(4), 333–346, https://doi.org/10.1108/EUM0000000007304.
9. Hansen, T. (2016). The moderating effects of financial broad-scope trust on consumer knowledge, cognitive effort, and financial healthiness. Journal of Consumer Behaviour, 16(2), 161-175. https://doi.org/10.1002/cb.1621.
10. Hansen, T. (2014). The role of trust in financial customer-seller relationships before and after the financial crisis. Journal of Consumer Behaviour, 13(6), 442–452. https://doi.org/10.1002/cb.1493.
11. Blumberg Capital’s Fintech Survey – Consumer Loyalty is Keeping Banks Alive. URL: http://fintech.blumbergcapital.com.
12. Standardized products and consumer financial decision-making (a behavioral analysis). Netherlands Authority for the Financial Markets. 2015. Retrieved from https://www.afm.nl/en/nieuws/2015/mrt/rapport-standaardproducten.
13. Knack, S., Keefer, P. (1997). Does Social Capital Have an Economic Payoff? A Cross-Country Investigation. Quarterly Journal of Economics, 112 (4), 1251–1288.
14. Delhey, J., Newton, К. (2005). Predicting cross-national levels of social trust: global pattern of Nordic exceptionalism? European Sociological Review, 21(4), 311– 327.
15. Pauline, W. J. van Esterik-Plasmeijer, Fred, van Raaij W. (2017). Banking system trust, bank trust, and bank loyalty. International Journal of Bank Marketing, 35, 1. http://dx.doi.org/10.1108/IJBM-12-2015-0195.
16. Guiso, L., Sapienza, P., Zingales, L. (2008). Trusting the Stock Market. The Journal of Finance, 63, 2557–2600.
17. Devlin, J. F., Ennew, Ch. T., Sekhon, H. S., Roy, S. K. (2005). Trust in financial services: Retrospect and prospect. Journal of Financial Services Marketing, 20(4), 234–245. https://doi.org/10.1057/fsm.2015.21.
18. Moin S., Devlin J., McKechnie S. (2017). Trust in financial services: the influence of demographics and dispositional characteristics. Journal of Financial Services Marketing, 22(2), 64-76. https://doi.org/10.1057/s41264-017-0023-8.
19. Hansen, T. (2012). Understanding trust in financial services: the influence of financial healthiness, knowledge, and satisfaction. Journal of Service Research, 15(3), 280-295. https://doi.org/10.1177/1094670512439105.
20. Ennew, Chr. T. The financial trust index. Financial services research forum. Retrieved from https://www.nottingham.ac.uk/business/businesscentres/crbfs/documents/researchreports/paper60.pdf.
21. How financial services lost its mojo – and how it can get it back. Pwc. 2014. Retrieved from https://pwc.blogs.com/files/how-financial-services-lost-its-mojo—and-how-it-can-get-it-back_full-report.pdf.
22. Järvinen, R. A. (2014). Consumer trust in banking relationships in Europe. International Journal of Bank Marketing, 32(6), 551–566. https://doi.org/ 10.1108/IJBM-08-2013-0086.
23. National Bank of Ukraine. Retrieved from https://bank.gov.ua/control/uk/publish/article?art_id=27843415&cat_id=44578.