Survey Shows Drop in Consumer Trust in Banks

A new survey conducted over several weeks shows a loss of confidence in financial institutions among several key demographics based on age, race, gender and income. The survey by the National Endowment for Financial Education (NEFE) explores consumer trust in financial institutions through two national opinion polls that bookended global, mainstream news coverage of the Silicon Valley Bank and Credit Suisse bank collapses.

“The bank failures that occurred in March have led to a noticeable breakdown in confidence in financial institutions for many individuals, families and businesses around the world. These data tell the story of how pervasive this concern is and can help financial educators, researchers and advocates understand in real time how Americans view volatility in the financial sector,” says Billy Hensley, Ph.D., president and CEO of NEFE. “Our questions aim to analyze whether a major public incident has an immediate impact on trust. This should drive new thinking and strategies when it comes to financial education and policy.”

NEFE, in conjunction with AmeriSpeak, polled U.S. adults on their opinions of financial institutions at a unique moment-in-time, using a two-phased approach. The first poll was conducted in late February, before mainstream news coverage of the collapse of Silicon Valley Bank, the 16th largest bank in the United States, and Credit Suisse, the second largest bank in Switzerland. The second poll, using the same questions and a comparable sample group, was conducted in early April, following weeks of news coverage of the crises. The questions helped determine how this issue impacted the overall sentiment of the industry, whether respondents were directly affected by it or not. High-level results of the poll showed the following:

Confidence that “existing policies and regulations” protect customers of financial services institutions remained at the same level in both polls, with 42% agreeing, 33% disagreeing and 25% saying “neither agree nor disagree.”
“Faith and confidence” in the financial system after the banking crises dropped, with those who have “faith and confidence” falling from 45% to 39% and those who don’t have “faith and confidence” increasing from 35% to 38%. Those who “neither agree nor disagree” increased from 20% to 22%.
Before the crises, half of the respondents said they generally trusted financial institutions to act “honestly and ethically.” This fell to 46% in the second poll. Those who disagree with the statement fell from 32% to 31% and those who selected “neither agree nor disagree” increased from 18% to 22%.
The crises did not impact whether respondents trust that financial institutions’ employees are well-trained and professional. Before the banking crises, four out of 10 U.S. adults trusted financial institution employees were well-trained and professional, and fell slightly to 38% in the second poll. Those who disagree decreased from 36% to 35% and those who “neither agree nor disagree” increased from 22% to 24%.

A breakdown of key demographic data from the poll includes the following points:

Comparing the responses based on gender, female adults had very marginal changes in the two polls. In contrast, male adults have become less trusting in financial institutions, including their opinions on “faith and confidence” (51% to 39%), and the training and professionalism of employees (42% to 35%).
Despite the recent bank crises, the percentage of younger adults (aged 18-29 years old) confident that existing policies and regulations protect customers of financial services institutions increased from 31% to 43%. A similar increase happened among those with a household income of <$30K (30% to 43%).
Opinions on financial institutions acting “honestly and ethically” shifted among those with different racial backgrounds in the two polls. There were decreases among Black adults (45% to 31%), Hispanic adults (50% to 36%) and adults who identify as another race or two or more races (62% to 56%). White adults remained nearly unchanged (49% to 50%).
The most considerable change in opinion between the two polls came from individuals who did not graduate high school. Their “faith and confidence” in financial institutions dropped from 54% to 25%.

For more on this survey, visit the Consumer Poll section of the NEFE website.

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