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Half of Americans have become more suspicious of their banks in the past five years.
Eighty-nine percent of Americans say they’re concerned over how banks use their personal data, says a study from review website Trustpilot.
“Consumers always have their wallets top of mind, and perhaps that’s no real surprise,” says Don Ross, president of the Americas at Trustpilot. “However, they are drawing a line in the sand when it comes to reputation and trustworthiness.”
But banks haven’t always been disliked by most of the public.
When banks were trusted
Last year, Debt.com reported that consumers were more likely to entrust banks with their personal data than retailers. Fifty-nine percent of American voters said they trusted their banks with sensitive information, compared to retail stores (11 percent), says a survey from The Electronic Payments Coalition (EPC).
Maybe it’s because they warn clients when a breach occurs. In 2017, one-third of U.S. consumers were warned about a fraud attempt on their account. That number had increased by 15 percent from the year before, according to a poll from CreditCards.com.
“Financial institutions are committed to protecting their customers’ information before a breach even occurs,” Molly Wilkinson, executive director of EPC, said in 2017. “Until there are similar data security standards for retailers as there are for financial institutions, community banks, and credit unions will continue to take on the burden of card replacement costs, reimbursing customers for fraud, and monitoring for fraudulent activity.”
Banks started to invest more into fraud prevention, according to CreditCard.com. But now we see a shift in Americans’ attitudes toward banks. Possibly because fraud is rising.
Banks are doing better to fight fraud, but there are other factors why Americans distrust them.
People with poor credit trust banks the least
Half of Americans don’t feel that banks can help them, says a study from Elevate’s Center for The New Middle Class (CNMC).
It’s mostly Americans with nonprime credit — or a credit score under 700. Two-thirds of these borrowers say they don’t trust banks, mortgage lenders and personal loan providers. The problems they have with these financial institutions:
- They’re 4 times as likely to say they’ve been denied for a loan over the past year
- Eight times as likely not to use a bank
- 48 percent less likely to think they’d be approved for a loan
- 21 percent less likely to believe they provide products fit for them
- Six times more likely to use an online-only financial institution
Interestingly, more Americans seem to be putting their faith into digital financial companies and products, like online banks. On the opposite side of Trustpilot’s study, 40 percent of Americans say online banks, more than traditional, are “very trustworthy.”
“For centuries, we have relied on banks to meet our financial needs – both big and small,” says Jonathan Walker, executive director of the CNMC. “Today, many Americans do not have that luxury. With the changing regulatory environment, banks may finally be able to serve this population again, either by partnering with financial technology companies, creating innovative new products, or by finding new means of underwriting their financial products.”
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Article last modified on June 20, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Americans Trust Their Banks Less Than Ever - AMP.