Banks have seen their reputation with the public tumble since the financial crisis. A recent poll published by the American Enterprise Institute sheds some light on the underlying trend. The public remains skeptical about banks and particularly the people running them.
The crisis “put a real scare in the American public,” said Karlyn Bowman, the AEI senior fellow who compiled the survey data. “The hangover is still there.”
That’s especially true for banking executives – likely leftover frustrations that few individuals were punished for their role in the crisis. Only 14% of people had “a great deal” of confidence in the people running banks, the latest data from 2016 show, down from roughly 30% before the crisis. Another 33% had “hardly any” confidence in banking leaders – up from about 10% in pre-crisis times.
Confidence in banks (as opposed to bank leaders) has ticked up slightly over the past decade. Some 30% of people had “a great deal” or “quite a lot” of confidence in financial institutions this year – this is down from closer to 50% before the housing collapse. At the same time, 66% of people reported in 2015 that they felt the financial system was no more secure than before the crisis. A similar proportion said last year that they predict another crisis like 2008 could be just around the corner. (One bright spot: 90% of respondents to one poll seem to be satisfied with their personal bank.)
What’s at stake? Customers now have more choice than ever when it comes to where they do their banking. This includes an increasing array of fintech competitors with arguably less “baggage” than the traditional banking industry.
Banks also remain “highly vulnerable to disruption from tech companies,” said Dan Ryan, banking and capital markets leader at PwC. “The banking industry must continue to work hard to gain public trust and confidence.” Banks have revamped many of their operations over the last decade, and they’ve spent billions of dollars complying with a host of new rules. But if they can’t figure out a way to win back more of the public’s trust, all that work could be for nothing.