Trust and trustworthiness in retail financial services: An analytical framework and empirical evidence

Building long-term relationships has long been advocated as being one of the core activities of any business, no matter what its type or size. An effective relationship between any business and its customers is characterised by genuine commitment, which is rooted in the development of trust (Morgan and Hunt 1994). The idea that ‘trust matters’ is not novel and there is nothing new about its significance in business relationships. As a concept, trust is simple to recognise when it is present and just as simple to recognise when it is breached. Although the benefits of trust are many and varied, its presence requires that there is a basis on which one party gives trust and the other accepts it. Understanding the factors that drive trust and trustworthiness is important during the development and management of effective business relationships. The financial services sector is suffering from a crisis of trust and the reputations of providers have been badly damaged as a consequence (Hansen 2012). In this chapter we outline what it is to trust and explore the factors that enable financial services providers to demonstrate trustworthiness