Northern Rock shaken trust

Banks and life assurance companies are the least trusted financial institutions after the Northern Rock crisis, according to a study.

A ‘trust index’ developed by the University of Nottingham has highlighted a sharp fall in consumer trust across the banking industry this year.

Banks received the lowest rating for having the interests of their customers at heart and the second lowest rating for overall trust.

Professor Christine Ennew, of Nottingham University Business School. who led the study, said: “Trust plays a crucial role in the provision of financial services and is fundamental to effective customer relationship management.”

Since the first full survey in 2006, brokers and advisers have consistently rated as the most trusted of all financial services institutions (FSIs).

This year credit card providers came second - last year they were among the least trusted of UK financial bodies.

The high trust ratings for brokers indicates that customers may still prefer face-to-face contact and a more personal service, the researchers suggest.

One of the important challenges facing FSIs is the building and maintaining of trust among younger age groups as respondents under 65 are not convinced they care about their customers.

Professor Ennew said: “Our studies consistently demonstrate that the younger age groups are far less trusting of financial services providers than older customers.

“Without active management of customer relationships in these target markets, there is a real danger that many financial institutions will be exposed to declining levels of consumer trust in the longer term.”