By Amber Jackson, Andrew Warren; Financial Health Network
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New Financial Health Pulse® data show that trust in financial institutions is uneven, with substantial racial and ethnic disparities across key dimensions of banking.
Consumers Are Hesitant To Trust Financial Institutions
Consumer trust in financial institutions is central to financial inclusion, the stability of the financial system, and consumer well-being. Trust is the foundation of daily financial decisions: each time a person opens a bank account, deposits their paycheck, or seeks financial advice, they place trust in a financial institution to safeguard their money and act fairly.
When that trust is lacking, consumers may disengage from the financial system entirely. Among the 5.6 million unbanked households in the U.S. in 2023, lack of trust is the second most-cited reason for not having a bank account (trailing only behind cost).1 Without a certain level of trust in financial institutions, people may choose to keep part or all of their money outside of the system. At a broader level, a widespread lack of confidence in financial institutions can undermine industry stability and, in extreme cases, contribute to bank runs and collapse of financial systems.
Trust also shapes how consumers perceive institutions’ intentions and effectiveness. Research shows that when institutional trust is low, people are more likely to question an institution’s fairness or lose confidence in its decisions.2,3,4 Previous Financial Health Network research finds that customers are more loyal and engaged when they believe their primary financial institution helps them improve their financial health.5 In short, a consumer’s trust influences not only whether they participate in the financial system, but also how deeply and sustainably they do so.
But what does it mean to trust a bank or credit union? When consumers report that they trust or do not trust financial institutions, they may have different financial services or underlying dimensions of trust in mind. To better understand these nuances, we added new questions to the 2025 Financial Health Pulse® survey to capture consumer opinions on various aspects of financial institutions, including confidence in deposit safety, trust in financial advice, transparency around costs and fees, and whether institutions genuinely want to help consumers improve their finances.