Transforming the nature of trust between banks and young clients: from traditional to digital banking
Abstract
Purpose
This study aims to explore how the shift from traditional to digital banking transforms the nature of trust between banks and their younger clients (aged 18–35) from the perspective of bank employees.
Design/methodology/approach
Qualitative semi-structured interviews with representatives of Ukrainian classical banks and neobanks were conducted. The interviews were analysed using the theoretical approach of institution-based and social network-based trust to identify the key distinctions between the nature of trust in traditional and digital banking.
Findings
The employees of the banks reported that digitalization processes have helped to mitigate trust issues; as a result, their banks have not experienced any difficulties in this regard among young people. Furthermore, social networks, particularly social approval, were found to be significant factors for establishing trust in digital banking among young people.
Research limitations/implications
The results of this study could assist bank managers in adapting their strategies for cultivating trust among younger clients and aiding international law regulators and government institutions in preventing unintended circumstances in financial services. These contributions were shaped by the study’s limitations, including its focus on only two concepts of trust building: institution-based and social network-based, as well as its specific Ukrainian context.
Originality/value
This study highlights social approval as a valuable constituent of the trust-building process that influences trust in institutions. Furthermore, while gaining social approval – particularly through digital platforms – can promote trust-building among young people, this “easy way” may have negative societal consequences by endorsing unscrupulous institutions.
Keywords
Acknowledgements
I am grateful to the Associate Editor and the two anonymous reviewers who provided me with professional, prompt, and constructive feedback to enhance the paper. I also extend my thanks to Prof. Anatoli Bourmistrov and Assoc. Prof. Olga Iermolenko for their valuable comments and insights, which greatly contributed to the development of the paper.
Citation
Melnyk, V. (2023), "Transforming the nature of trust between banks and young clients: from traditional to digital banking", Qualitative Research in Financial Markets, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/QRFM-08-2022-0129
Publisher
:Emerald Publishing Limited
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