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Trust in financial institutions is widely considered important. However, a clear overview of studies on the drivers of trust is missing. We intend to fill this gap in the literature. After discussing why trust in financial institutions is important, we turn to its measurement, where we distinguish between trust in one's own institution and trust in institutions in general (narrow‐scope and broad‐scope...
Based on analysis of 14 years of data on Dutch consumers' trust in financial institutions, we find that financially literate consumers are more likely to trust banks, insurance companies and pension funds. This result applies both to broad‐scope trust (trust in financial institutions in general) and narrow‐scope trust (trust in one's own financial institution). Our conclusion holds when we use a financial...
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