Why Are Americans Losing Trust in Banks (Again)?
The banking industry's image and reputation had been on the mend in the last few years. But half of US adults now say their trust in banks has been declining.
American consumers have more choices than ever before when it comes to selecting a financial institution. But just how much trust do Americans have in these institutions? Half of US adults say their trust in banks has declined over the past few years, although only 18% of Americans say the same about credit unions. Nearly half (49%) state their trust in credit unions has remained consistent over the past few years. These findings stem from a Harris poll of 2,537 U.S. adults surveyed between August 13 and 18, 2014.
Levels of Consumer Trust in U.S. Financial Institutions
| Consumers Trust in Financial Institutions | Great deal of trust | Some trust | Very little trust | No trust at all |
|---|---|---|---|---|
| Credit union | 37% | 40% | 7% | 5% |
| Community bank | 29% | 47% | 11% | 4% |
| Regional bank | 19% | 51% | 14% | 7% |
| National bank | 13% | 48% | 20% | 10% |
| Online bank | 7% | 32% | 27% | 20% |
Local credit unions and local/community banks are the most trusted institutions, with over three-quarters of Americans having some or a great deal of trust in them (77% & 76%, respectively). Local branches of regional banks come in third, with 70% having at least some trust in them.
Local credit unions are more trusted by Matures and Baby Boomers (85% & 83%, respectively), than by Gen X’ers and Millennials (76% & 69%, respectively). The same is true for local branches of regional banks (77% Matures & 74% Baby Boomers vs. 68% Gen X’ers & 66% Millennials).
Big national banks rank second to last, having the trust of only 50% of Americans. Meanwhile, 42% state they have no trust at all or very little trust in these institutions. However, a slightly larger percent (61%) trust local branches of these banks.
Online-only banks are seen as the least trustworthy, with only 39% of Americans having at least some trust and 47% having no or very little trust in them.
Younger generations (42% of both Millennials & Gen X’ers) are more likely to trust online-only banks, compared with just 30% of Matures.
There is also a regional divide. Those in the East and West are more likely to trust these institutions, compared with adults in both the Midwest and South (46% East, 44% West vs. 36% Midwest, 33% South).
| Percentage of consumers who say they have less trust in various institutions | Total | Millennials | Gen-X | Boomers | Mature |
|---|---|---|---|---|---|
| Congress | 72% | 59% | 70% | 80% | 86% |
| Federal government | 63% | 51% | 63% | 71% | 77% |
| Mortgage lenders | 57% | 46% | 55% | 65% | 67% |
| Wall Street | 57% | 48% | 55% | 66% | 62% |
| White House | 53% | 43% | 54% | 58% | 67% |
| Major corporations | 51% | 46% | 49% | 56% | 54% |
| Health insurance companies | 51% | 44% | 52% | 57% | 49% |
| Banks | 50% | 42% | 51% | 57% | 52% |
| Auto/home insurance companies | 42% | 40% | 39% | 46% | 41% |
| Hollywood | 40% | 35% | 36% | 44% | 52% |
| Religious institutions | 34% | 35% | 38% | 33% | 27% |
| Credit unions | 18% | 23% | 18% | 16% | 10% |
| US military | 16% | 24% | 14% | 11% | 8% |
| Small businesses | 9% | 13% | 7% | 8% | 5% |
Factors Influencing Trust in Financial Institutions
Many factors have a great deal of influence on the trust Americans have for financial institutions. Personal experience tops this list, with 66% of Americans stating this factor has a great deal of influence on their level of trust. The quality of products and services, quality of customer care, and amount charged in fees all tie for next most influential, with 56% saying each of these have a great deal of influence.
| Factors influencing consumer trust in financial institutions | Great deal of influence | Some influence | Not much influence | No influence at all |
|---|---|---|---|---|
| My personal experience with them | 66% | 19% | 5% | 3% |
| The quality of their products and services | 56% | 29% | 4% | 4% |
| The quality of their customer care | 56% | 29% | 5% | 3% |
| The amount they charge in fees | 56% | 28% | 6% | 3% |
| Their willingness to work with me in times of need | 55% | 27% | 5% | 4% |
| The number of different fees they charge | 54% | 28% | 6% | 4% |
| Being easily accessible | 48% | 34% | 7% | 4% |
| Communications with customers | 45% | 37% | 7% | 4% |
| The experience my friends and family have with them | 39% | 37% | 11% | 6% |
| Their role in the overall economy | 32% | 43% | 11% | 5% |
| What I’ve heard about them in the news | 28% | 46% | 12% | 6% |
| The level of profit they make from customers | 35% | 35% | 14% | 7% |
| Their role in my community | 24% | 39% | 19% | 9% |
| What I’ve seen about them in social media | 12% | 28% | 24% | 26% |
| Factors influencing consumer trust in financial institutions by generation | Total (All Ages) | Millennials | Gen-X | Boomers | Mature |
|---|---|---|---|---|---|
| My personal experience with them | 66% | 56% | 69% | 71% | 76% |
| The quality of their products and services | 56% | 47% | 55% | 63% | 66% |
| The quality of their customer care | 56% | 46% | 54% | 64% | 66% |
| The amount they charge in fees | 56% | 48% | 54% | 62% | 64% |
| Their willingness to work with me in times of need | 55% | 44% | 54% | 64% | 66% |
| The number of different fees they charge | 54% | 47% | 53% | 60% | 57% |
| Being easily accessible | 48% | 35% | 44% | 55% | 68% |
| Communications with customers | 45% | 36% | 43% | 52% | 50% |
| The experience my friends and family have with them | 39% | 41% | 41% | 38% | 36% |
| The level of profit they make from customers | 35% | 28% | 34% | 42% | 37% |
| Their role in the overall economy | 32% | 27% | 30% | 37% | 37% |
| What I’ve heard about them in the news | 28% | 29% | 29% | 30% | 20% |
| Their role in my community | 24% | 22% | 23% | 25% | 31% |
| What I’ve seen about them in social media | 12% | 15% | 14% | 9% | 7% |
Personal experience is particularly important for older generations. Matures, Baby Boomers, and Gen X’ers are all more likely than Millennials to say this factor has a great deal of influence on their trust (75%, 71%, & 69% vs. 56%, respectively).
At the bottom of this list, only one-fourth of Americans consider an institution’s role in the community (24%) to be greatly influential, with even fewer greatly influenced by what they find about them on social media (12%).
While still small percentages, both Millennials and Gen X’ers are more likely to state social media has a great deal of influence on their level of trust (15% & 14%, respectively), compared with only 9% of Baby Boomers and 7% of Matures.
Which Providers US Consumers Choose for Their Banking Needs
Despite big national banks being among the least trustworthy institutions, they retain the highest percentage of customers, with 45% of Americans stating they are a customer of one of these institutions.
| Summary of Customer Status by Generation | Total (All Ages) | Millennials | Gen-X | Boomers | Mature |
|---|---|---|---|---|---|
| Credit union | 33% | 26% | 33% | 38% | 39% |
| Community bank | 21% | 15% | 19% | 26% | 26% |
| Regional bank | 21% | 17% | 24% | 23% | 26% |
| National bank | 45% | 43% | 46% | 45% | 53% |
| Online bank | 10% | 11% | 13% | 8% | 10% |
| None of the above | 9% | 17% | 8% | 5% | 1% |
Not surprisingly, those who are customers of a national bank are more likely to have at least some trust in these institutions, compared with those who are customers of a local/community bank, a local credit union, or a regional bank (63% vs. 46%, 44% & 52%, respectively).
Those in the West are more likely than those in other regions to be a customer of a big national bank (61% West vs. 43% South, 36% Midwest & 42% East).
Americans living in a rural location are less likely to be customers of big national banks, compared to those living in other locales (30% rural vs. 49% suburban & 52% urban).
One-third of Americans (33%) are customers of a local credit union, with older generations more likely than Millennials to utilize them (39% Matures, 38% Baby Boomers, 33% Gen X’ers, & 26% Millennials). One-in-ten Americans state they are customers of an online-only bank.
