Merle Baake
THE IMPACT OF DRAMATIC
BRAND-RELATED EVENTS ON
CONSUMERS’ TRUST IN THE
FINANCIAL SERVICE INDUSTRY
What is the effect
of dramatic
brand-related events
in the financial service
industry on consumers’ trust in banks
and are there any
spillover effects
?
THEORETICAL FRAMEWORK
S Y S T E M T R U S T
D R A M AT I C B R A N D - R E L AT E D E V E N T S
I N S T I T U T I O N T R U S T
S P I L L O V E R
Consumers have a natural tendency to generalize negative information to other related attributes(Ahluwalia et al., 2001)
T Y P E O F E V E N T
Executive compensation is main reason for negative effect on trust (Jansen et al., 2015)
Fraud as a reason for the collapse of trust
METHODOLOGY
D ATA C O L L E C T I O N www.banken.nl M E T H O D Male 49,5% Female 50,5% 18-34; 17,2% 35-49; 26,8% 50-64; 30,6% 65+; 25,3% G E N D E R A G E Low; 24,5% Medium; 39,3% High; 36,2% E D U C AT I O N S Y S T E M T R U S T 2,8 3,0 3,2 3,4 3,6 3,8 4,0 Jul-15Sep-1 5 Nov-15 Jan-16 Mar-1 6 May-1 6 Jul-16Sep-1 6 Nov-16 Jan-17 Mar-1 7 May-1 7 Jul-17Sep-1 7 Nov-17 Jan-18 Mar-1 8 May-1 8 Bank A Bank B Bank C Bank D Other 2,2 2,7 3,2 3,7 1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 10 6 11 3 12 0 12 7 13 4 14 1 14 8 15 5Time (in weeks)
System Trust Preventable Events Unpreventable Events
D R A M AT I C B R A N D - R E L AT E D E V E N T S S Y S T E M T R U S T 2.895 S Y S T E M T R U S T 3.257 I N S T I T U T I O N T R U S T
RESULTS
T Y P E O F E V E N TEstimate Std. Error t-value (Intercept) 2.813 *** 0.0348 80.95
Time in months 0.006 *** 0.0016 3.57
All events - 0.059 * 0.0344 - 1.71
R2: 0.080 AIC: -41.022 BIC: -28.772
The asterisk ***, ** and * denote statistical significance at 1%, 5% and 10% levels, respectively
Estimate Std. Error t-value (Intercept) 2.808 *** 0.0343 81.906
Time in months 0.006 *** 0.0017 3.424
Preventable events - 0.065 * 0.0377 - 1.732
Unpreventable events - 0.002 0.0477 - 0.039
R2: 0.081 AIC: -39.126 BIC: -23.813
I N S T I T U T I O N T R U S T
S P I L L O V E R
Estimate Std. Error t-value(Intercept) 3.201 *** 0.0376 85.121
Time in months 0.003 * 0.0018 1.764
All events - 0.016 0.0448 - 0.367
R2: 0.019 AIC: -9.329 BIC: -2.921
The asterisk ***, ** and * denote statistical significance at 1%, 5% and 10% levels, respectively
BANK B Estimate Std. Error t-value (Intercept) 3.141 *** 0.0186 169.319
Time in months 0.002 ** 0.0009 2.192
Events Bank B - 0.084 ** 0.0379 - 2.232
R2: 0.0535 AIC: -229.985 BIC: -217.735
The asterisk ***, ** and * denote statistical significance at 1%, 5% and 10% levels, respectively
E) Model Other
Estimate Std. Error t-value
(Intercept) 3.810 *** 0.0181 210.55 Time in months - 0.001 0.0009 - 0.735 Events Bank A - 0.036 0.0318 - 1.140 Events Bank B 0.093 ** 0.0382 2.438 Events Bank C - 0.050 0.0347 - 1.450 Events Bank D 0.002 0.0796 0.023 R2: 0.055 AIC: -236.523 BIC: -215.085