Trust in finance is shifting. The global financial crisis which swept the world ten years ago increased already visible consumer skepticism, and while economies have since rebounded, the financial sector has never truly recovered that trust from the public. But the crisis in trust goes far deeper than memories of that meltdown.
In her recently published book, “Who Can You Trust?: How Technology Brought Us Together and Why It Might Drive Us Apart” (Hachette, November 2017), trust expert Rachel Botsman, after examining the changes in trust over the last few centuries, reveals what financial professionals can do to regain and maintain the trust of consumers who keep the economy – and their institutions – flowing.
Big financial firms and institutions are victims of the same social trends that have seen government, media, and corporations hit all-time-low levels of public trust. But for the financial sector, the evaporation of trust is not only more acute but potentially disastrous for everyone. In an interview with Botsman, Bank of England Chief Economist Andy Haldane says that lack of trust could be a self-fulfilling prophecy that brings about the next financial calamity: “When that trust [in the financial system] goes south, money and finance collapses. In some ways, the loss of trust is the very definition of a financial crisis.”
For the good not just of their own organizations but for the entire global economy, “Who Can You Trust” serves as a practical tool for financial firms and central banks to study how trust is evolving, grasp why trust in institutions is on the wane, and explore how they can rebuild some degree of trust by leveraging the very technology that has served to facilitate the revolution of which Botsman speaks.