Trust is essential for individuals. We want others to keep their promises and meet our expectations (Dan der Cruijsen et al., 2020, p.680-681). This also applies to banks. For many individuals, trusting their bank is essential to ensure financial security. The interest rate increases between 2022 and 2023, and the increased bank profits, as a result, caught the attention of many individuals. Could two events like these possibly disrupt individuals' trust toward banks? As a result of the high inflation in Sweden in recent years, interest rates increased significantly between 2022 and 2023 which shocked many individuals. Furthermore, banks' profits increased because of the increased interest rates. While banks are profit-making companies, they need to be cautious not to lose the trust of their customers. This study is based on theories fundamental to answering the study's research questions and purpose. The purpose is to provide an understanding of the factors that affect individuals trust toward their main bank. In addition, the study analyzes factors that may influence the disruption of trust toward banks. The focus will be on whether the interest rate increases and banks' increased profits between 2022 and 2023 have disrupted individuals' trust. The theories used to respond to the purpose are the anchoring effect, point of reference, financial literacy, asymmetric information, and overconfidence. A quantitative method was adapted for this study to collect data through a questionnaire. By building the questionnaire on appropriate theories, we could examine how our results were consistent with previous research. Later, a linear regression analysis was conducted in Stata based on our collected data. Correlation, multicollinearity, and heteroscedasticity were tested to obtain proper values. The results from this study show several factors that affect individuals' trust toward banks. Also, it indicates that the sudden interest rate increases and the increased bank profits between 2022 and 2023 disrupt individuals' trust toward banks. Some factors that affect the level of trust are whether the individual has experience of incorrect financial advice, lives in a small city, and feels that they do not receive enough information from the bank. These factors can be linked to previous research on asymmetric information. Other factors that affect trust are how easily individuals generally trust other people and whether individuals visit a bank office for banking affairs. These factors can be linked to previous research on point of reference. Furthermore, individuals having an elementary school degree as the highest education level and unemployed individuals are factors affecting trust that can be linked to financial literacy. These mentioned factors are only a few, the remaining ones are to be found in the result. This study provides a better insight into trust and trust disruption because of the two events, increased interest rates, and increased bank profits. The results are beneficial both for individuals and banks.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:umu-226088 |
| Date | January 2024 |
| Creators | Svensson, Frida, Fanqvist, Maja |
| Publisher | Umeå universitet, Företagsekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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