Slideshow Data: The value of trust

Published
  • January 18 2018, 12:00pm EST
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Trust is probably the most critical attribute of any organization that deals with a person's financial well-being. However, trust is easily lost — look at Equifax as an example of how fortunes can change overnight.

This week’s data looks at the shifting sands of trust to highlight potential areas of vulnerability for incumbents. We also look at the demographic groups that may need targeting for education of evolving payment paradigms.

In what is very good news for financial institutions, they are still seen as the most trustworthy entities for storage and handling of personal identifiable information (PII), by nearly 25 percentage points more than their closest rivals in a 2016 IPSOS / Mori poll conducted in the U.K.

Behind FIs came the government, with a third of adults stating that they trust the government with PII. Other organizations fared worse — online retailers, email providers, cellular carriers and ISPs were trusted by less than 20% of adults, with social media and charities being the least trusted.

However, trust is fickle and as the next datapoint illustrates, millennials' loyalty to financial institutions isn’t robust.

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A recent survey from Cornerstone Advisors asked millennials whether they would be likely to use a debit card from a number of P-to-P payment providers. The survey split millennials into two groups — younger millennials (20 somethings) and older millennials (30 somethings).

A significant number of millennials said they would opt for a debit card from a wide range of non-FI P-to-P providers, with older millennials more inclined to do this than younger millennials.

The P-to-P player with the most likelihood of attracting millennials was PayPal, with 65% of young millennials and a staggering 83% of old millennials expressing that they would be likely or very likely to use a PayPal debit card. This was closely followed by Amazon Pay with 58% of young millennials and 73% of old millennials indicating that they would use an Amazon Pay debit card.

Rather surprisingly, Google Pay was more popular than Apple Pay among millennials — 63% of old millennials were interested in a Google Pay debit card, compared to 57% of old millennials interested in a card from Apple Pay.

The least popular P-to-P providers for a debit card were Facebook, Zelle and Snapcash, although over a third of older millennials indicated that they would use a debit card from these providers. However, this does indicate a lower level of trust among consumers for social networks compared to more dedicated payments players. Presumably, the relatively low level of interest in Zelle can be attributed to a lower level of awareness of the brand which launched in June 2017 (the survey was fielded in Q3 2017).

Longitudinal data from Marketing Sciences indicates some interesting trends in trust related to digital wallets — trust in digital wallets is increasing across almost all providers over time — both bank and non-bank. This indicates an increasing familiarity with these products based on adoption and high levels of marketing to drive awareness.

Again, PayPal ranks highest in trust, with 43% of smartphone owners stating that they would trust them with a mobile wallet in June 2016, up marginally from 41% a year earlier. Closely following PayPal came the respondent's primary FI and the card networks, Visa and Mastercard, with a third of smartphone owners trusting Visa and Mastercard, and 39% trusting FIs for digital wallets.

Tech companies like Apple, Amazon, Google and Samsung ranked lower than more traditional payment brands, but again, the upward trend in trust is encouraging for the long-term success of digital wallets and mobile payments. In this survey, Apple outranked Google, presumably due to Apple Pay's head start in the market compared to Android Pay (which replaced the older Google Wallet).

A U.K. survey by Toluna in 2016 provides some indicators of where industry stakeholders need to focus demographically when it comes to trusting contactless payments and encouraging adoption in other markets that are lagging, such as the U.S.

Thirty-five percent of men stated they never pay with contactless because they don’t trust it, compared to 29% of women. By age range, those over 55 were the most skeptical — 43% stated they never pay with contactless payments because of fraud fears, compared to just 31% of 35-54 year olds and 22% of under-35 year olds.

This marked split in trust shows that older male consumers need to be targeted for education relating to trust and security of contactless if widespread adoption is to occur.