Consumer financial anxiety US regional financial service firms’ trust building response to the financial crisis

Devon S. Johnson, Mark Peterson

Research output: Contribution to journalArticlepeer-review

14 Scopus citations


Purpose–The purpose of this paper is to examine how small and medium-sized, regional financial service firms reacted to the financial crisis by helping their customers cope with their heightened state financial anxiety during the Economic Crisis of 2008. It also examines the variety of strategies pursued by these firms to rebuild consumer trust in their brands in the ensuing years. Design/methodology/approach–The authors relied on grounded theory as a methodological approach to understand the unfolding situation of the financial crisis and to inductively develop a framework explainingmanagers’ experience with consumer financial anxiety and trust. Data collection involved key informant interviews with 20 CEOs and senior marketing and sales professionals of financial service firms in the USA. Findings–The study discloses a desire among many retail financial institutions to re-personalize their relationships with customers following the financial crisis. One motivating factor for this has been a demand by regulators for more evidence that the firm really knows its customers. The paper also found that some managers are ambivalent about mentioning regulatory oversight and Federal Deposit Insurance Corporation (FDIC) insurance to customers because it is unclear whether these issues heighten or reduce consumer fears. More research is needed to provide guidance to managers on how mention of regulatory oversight may be used strategically in a crisis. Research limitations/implications–This study was limited to regional financial service firms in the USA with assets of less than$1 billion. The extension of the study to compare other geographical markets or to large financial service firms remains to be done. This investigation could tell us whether consumers now trust regional banks more than they do large national banks, difference in the strategies they employed and whether they resulted in different rates of brand equity recovery. Practical implications–This paper suggests that the 2008 financial crisis may have resulted in permanent changes in consumer attitudes to financial services. As one manager suggested, “consumers havemoved froma trust-me phase to a show-me phase.” This implies that financial servicemanagers need to rethink how they build consumer trust. Such managers would do well to consider ways of integrating actions that reinforce the company’s integrity and commitment to its customers into different stages of their firms’ relationships with consumers. Social implications–Many small and medium-sized banks are re-embracing community-banking practices including building strong personal relationships with stakeholders after years of underinvesting due to these banks’ pursuit of property development investments. As a result of these developments, a stronger financial services industry could likely emerge. Accordingly, trust for this battered industry among consumers could improve. Originality/value–This paper discuss how the depersonalization of customer interactions by financial services firms through increased use of electronic channels and the use of call centers as primary interaction points may have weakened customer relationships and worsened consumer anxiety during the 2008 financial crisis. Additionally, it discusses both the failure of regulatory oversight and the symbolic effects of the big bank failures and the Madoff scandal in heightening consumer fears. Based on managerial interviews the paper discusses how financial service firms countered consumer anxiety by providing social support to customers, by repersonalizing customer interactions, and by reconnecting with local community values.

Original languageEnglish
Pages (from-to)515-533
Number of pages19
JournalInternational Journal of Bank Marketing
Issue number6
StatePublished - 26 Aug 2014


  • Brand failure
  • Consumer anxiety
  • Depersonalization
  • Global financial crisis
  • Re-personalization
  • System trust


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