WASHINGTON, D.C. -- Recent incidents such as Target's security breach, the Heartbleed bug, and eBay's systems hack have called attention to how much consumers trust the businesses they patronize to keep their personal information safe. That trust currently appears to be hard to come by. Just 21% of Americans have "a lot of trust" in the businesses or companies they regularly interact with to keep their personal information secure.
In addition to low trust in companies' abilities to keep their data secure, Americans report decreasing trust in companies in general. Thirty-seven percent say their general level of trust in the businesses and companies they regularly do business with has declined either a little or a lot over the past year.
Banks, Credit Card Companies Top List of Institutions Consumers Trust
Consumers have more trust in the security of their information with some businesses or institutions than others. When asked how much they trust a list of nine institutions to keep their personal information secure, banks and credit card companies are the highest on the list, with 39% of consumers having a "lot of trust" in them. Following banks at a considerably lower level are health insurance companies (26%) and cellphone providers (19%). Given the rigorous data privacy provisions of HIPAA, Americans' level of trust in insurance companies is surprising. Bringing up the rear are online retailers (6%) and social networking websites or applications (2%).
U.S. consumers lost a great deal of confidence in banks and other financial institutions after the Great Recession. Consumer confidence hit a low point in June 2012, with 21% of Americans saying they had "a great deal" or "quite a lot" of confidence in U.S. banks. Five years earlier, however, before the financial crisis, confidence in banks stood at 41%. Today, 22% of Americans have a great deal or quite a lot of confidence in U.S. financial institutions or banks, according to a Gallup poll conducted March 7-9, 2014. While still not stellar, this improvement has been steady and substantial.
Nonetheless, consumers trust banks to protect their personal data at levels considerably higher than their overall confidence in the institutions themselves. The key differentiator here may be the protection of personal information. While, in general, the industry has suffered a negative reputation since the 2008 financial crisis, banks and credit card companies are potentially held to specific legal parameters regarding the protection of personal information. This higher standard could influence the amount of trust consumers say they have in the security of their sensitive data with financial institutions compared with other industries.
Implications
The results of this poll speak strongly to the opportunity available to the banking industry. Even in the face of an uphill battle to regain public confidence, the industry leads many other businesses that collect personal information by 13 percentage points in establishing trust with customers that their personal information will be protected. Although this represents one facet of confidence, it is potentially one that is becoming more important as consumer trust as a whole declines and threats to the security of personal information become increasingly common.
Gallup's research on customer engagement underscores the importance of confidence in building an emotional tie with consumers. But companies don't gain this emotional bond with their consumers overnight. Banks must focus on providing consistent service to meet basic customer expectations, while at the same time establishing the trust that they will always deliver on what they promise -- in a market where promises are often attached to dollar amounts. Developing an emotionally engaged relationship with a customer is no doubt hard work, but it is not without reward. Trust breeds engagement, and engaged customers not only generate more revenue for banks, but they also have a higher number of investments and deposits with their primary bank, according to a 2013 Gallup study of the industry.
Banks can potentially capitalize on this opportunity by showing that their protection of personal information isn't just about legal ramifications. Instead, showing patrons that promises are kept because they care about their customers' financial well-being as a whole creates an opening for an emotional connection. Personal finance is personal, and there isn't a way around it. Banks need to assure customers that they are on their side, looking out for the security of consumers' sensitive information and keeping their best interests top of mind. In an increasingly insecure world, consumers need all the data security friends they can get.
Survey Methods
Results for this Gallup poll are based on telephone interviews conducted April 23-29, 2014, with a random sample of 1,011 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
For results based on the total sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level.
Interviews are conducted with respondents on landline telephones and cellular phones. All interviews were conducted in English. Each sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. They are also weighted to match the national demographics of gender, age, race, Hispanic ethnicity, education, region, population density, and phone status (cellphone only/landline only/both, and cellphone mostly). Demographic weighting targets are based on the most recent Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the most recent National Health Interview Survey. Population density targets are based on the most recent U.S. census. All reported margins of sampling error include the computed design effects for weighting.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more details on Gallup's polling methodology, visit www.gallup.com.
