Germans and the Financial Industry: A Lack of Trust

• 2023 Edelman Trust Barometer: Insights for Financial Services
• Among 17 selected industries, companies in the financial sector are the second least trusted globally, with only companies in the social media sector being viewed more critically.
• Vote of Distrust: Only 40% of respondents in Germany trust companies in the financial services sector.

The 2023 Edelman Trust Barometer – Insights for Financial Services reveals areas that are particularly distrusted and those that have surprisingly gained trust.
Frankfurt am Main, July 11, 2023 – Trust in the German financial industry is not looking good, as shown by the latest 2023 Edelman Trust Barometer – Insights for Financial Services. Among 17 selected industries, companies in the financial sector are the second least trusted globally, with only companies in the social media sector being trusted less. Only 40% of respondents in Germany state that they trust companies in the financial services sector, a vote of distrust that is below the global average (59%).

A closer look at specific subsectors of the industry reveals deep mistrust towards cryptocurrencies and digital assets in Germany, with only 18% of Germans surveyed trusting this subsector (the range of distrust is between 1 and 49 percentage points). Similarly, investment management (34%), financial advice (33%), and fintech companies (31%) fall within the range of mistrust.

Lack of vision is evident

General fears drive skepticism

“In general, the results reveal a fundamental lack of trust in an important sector of our economy,” says Holger Nacken, Managing Director Financial Services at Edelman Smithfield. Additionally, a further decline in trust is expected globally. “We witnessed the implosion of the crypto giant FTX at the end of last year. In the United States, bankruptcies of regional banks caught most people unprepared. In Switzerland, the government-led acquisition of Credit Suisse by UBS, which will reshape wealth management globally and also the Swiss banking industry,” says Nacken. In short, the entire sector is once again the subject of public discussion.

This sector skepticism is embedded in societal and existential fears. Currently, globally surveyed respondents fear both in their personal lives (89% fear job loss) and in the societal sphere (76% fear climate change, 72% fear a nuclear war). The fear of inflation is also widespread, at 74% globally. In this regard, Germans are slightly more optimistic at 69%. However, when it comes to general economic optimism, only 15% of Germans agree with the statement “My family and I will be better off in five years.” Only the Japanese and the French are more pessimistic.

The path to building trust

But how can companies in the financial industry build trust in this climate of distrust? “Transparency and education are at the center, with the workforce playing an important role because there are also positive signals there,” explains Nacken. When it comes to employees, the question of trust is quite different: of all the 17 industries surveyed, trust in their own employer is highest within the financial sector, at 83%. “It is advisable to credibly involve employees in communication,” Nacken advises. Building and strengthening trust today primarily require transparency, honesty, and preparation. It is not possible to react with the necessary speed in a socially and globally interconnected world without having a well-thought-out strategy and positioning in advance. In the current situation, there is a high industry risk: the problems of individual financial companies have a negative impact on the entire sector. Nacken says, “The clearer a financial institution communicates its own corporate values and is publicly understood, the better its chances of weathering such crises and even emerging stronger from them.”

About the Edelman Trust Barometer: The 2023 Edelman Trust Barometer is the 23rd annual survey of trust and credibility conducted by Edelman. The study was conducted by the Edelman Trust Institute and is based on 30-minute online interviews conducted between November 1 and November 28, 2022. The Edelman Trust Barometer 2023 survey included more than 32,000 respondents from 28 countries, with an average of 1,150 people per country. The scoring indicates that people trust when the score ranges from 50 to 100. A range of 50 to 60 is considered neutral, and below 50 indicates mistrust.