Financial Knowledge and Trust in Financial Institutions

Abstract

Using fourteen years of data on Dutch consumers' trust in financial institutions, we find that financially literate consumers are more likely to trust banks, insurance companies and pension funds, and the competence and integrity of the managers of these institutions. This holds both for broad-scope and narrow-scope trust. Although trust in respondents' own financial institutions is significantly higher than general trust in financial institutions, both forms of trust are positively related. Financially knowledgeable people are more likely to trust the prudential supervisor. Finally, our results indicate that trust in the supervisor is positively related to trust in the financial sector.

Sustainable development and financial institutions: Do banks' environmental policies influence customer deposits?

“…Indeed, customers' decisions to choose a bank constitute a relevant factor for banking stability (Basel Committee on Banking Supervision, 2001). The way in which customers create a deposit relationship with banks has been investigated by previous literature (Fungáčová, Hasan, & Weill, 2019; Ibe‐Enwo, Igbudu, Garanti, & Popoola, 2019; Sedunov, 2020; Van der Cruijsen, de Haan, & Roerink, 2019), and in particular, scholars have focused on the demographic and socio‐economic characteristics of the depositors (Campbell, 2006; Sedunov, 2020). Even if some academics argued that financial services could be perceived as “all the same” (Anderson, Cox, & Fulcher, 1976; Devlin, 2002), previous literature reveals that customers base their choice of a particular provider of financial services primarily on the location convenience offered and on the experience of their own parents (Bayer, Gimpel, & Sarikaya, 2019; Martenson, 1985; Ta & Har, 2000).…”

Exploring the Intention of Middle-Aged and Elderly Consumers to Participate in Inclusive Medical Insurance

“…Most of the existing literature discusses trust from a single dimension, but there are also cross-studies on trust. van der Cruijsen, et al [47] used consumer data spanning 14 years and self-assessment methods to find that people with high financial literacy are more likely to generate financial trust, which can also be transferred to institutional trust. Technological trust refers to the dependence and confidence of computer technology, which is constrained by rules and can make corresponding response measures [48].…”

Design and Evaluation among Young Adults of a Financial Literacy Scale Focused on Key Financial Decisions

“…Building on a longitudinal study, Van der Cruijsen et al (2021) found that more financially literate people seem to be better able to deal with financial institutions, indemnity companies, and retirement funds [4]. Higher FL increased the probability of long-term financial planning and better choice of financial products [1].…”