Do Customers Still Trust Banks?
Surveys show that business remains resilient despite recent bank failures
- Written by Banking Exchange staff
Consumer trust in the banking system remains strong and small business loans have not been affected through the recent turbulence in the banking sector, new surveys show.
A poll of 2,190 US adults found that 70% still trusted banks to “do what is right”, according to data and analysis company Morning Consult. This is an increase from 66% in February.
Trust was particularly strong among customers of regional banks, with 81% saying they trusted them. In contrast, just 57% of digital bank customers said the same.
The research also found that approximately a third (35%) of US bank customers said they were “very confident” in the security of their deposits, with 44% “somewhat confident”. Just 5% were “not confident at all”.
“The share of consumers moving specifically because of Silicon Valley Bank’s collapse is not alarming, but the share of adults withdrawing their money from banks is certainly surprising,” said Charlotte Principato, financial services analyst at Morning Consult.
She added that cryptocurrency owners were likely to have been the majority of people withdrawing deposits.
Meanwhile, small business lending has remained unchanged through the past two weeks of uncertainty, according to research by Lendio.
The financial services company polled 21 lenders and funders and found that none had experienced a change in lending capacity. The survey also found no change to liquidity conditions.
“In speaking with our funding partners over the past several days, we are pleased to see the stability and confidence there for small and medium-sized businesses,” said Mark Cottle, Lendio’s executive vice president.
However, 38% of respondents to Lendio’s survey said they were “evaluating potential changes to their underwriting criteria”, the company reported, which suggested that there was “some heightened aversion to future risk”.
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