TRUST IN THE FINANCIAL SECTOR: A NEW APPROACH TO CONCEPTUALIZING AND MEASURING

S. Onyshchenko, М. Brychko, V. Litovtseva, A. Yevsieieva
2022 Financial and credit activity problems of theory and practice  
Abstract. In the new global economy, public trust in the financial system has become a central issue for financial crises overcoming. There is evidence that trust plays a crucial role in regulating economic agents' relationships. One of the most significant challenges for research is developing the unified methodological basis for element and integrated assessment of public trust level in the financial sector. This study intends to develop the methodology of public trust assessment in the
more » ... ial sector at all levels, taking into account quantitative and qualitative indicators. This article examines the scientific and applied aspects of qualitative and quantitative assessment methods based on surveys of economic agents and economic-mathematical modeling tools, analyzing the researchers experience and outlines methodological approaches to assessing the public trust in the financial system in modern conditions. Important aspects are outlined, and the advantages and disadvantages of the different approaches for element and integrated assessment of public trust on different levels of the financial system are systematized. In order to estimate the public trust in the financial system, the multidimensional factor analysis was conducted based on a set of standardized financial indicators for the period from 2010 to 2020. Multidimensional factor analysis employed for data processing and analysis was performed in the computational system STATISTICA. The multidimensional factor analysis results show that trust in the financial sector was grouped into three levels: macro-, mezo-, and micro-level. The results show that the increase in nominal salary and an increase in the share of deposits and loans in the national currency in the loan and deposit portfolio of deposit-taking corporations are statistically significant and positively affect the level of trust in the financial sector. However, the deepening crisis of trust, in turn, is due to the dollarization of the banking sector, increasing the growth of cash outside deposit-taking corporations. The scientific novelty of the obtained results is represented by a set of theoretical and practical aspects of the study, namely the methodology of public trust assessment in the financial sector at all levels of manifestation, taking into account quantitative and qualitative indicators. Keywords: public trust in the financial sector, integrated assessment, element-by-element assessment, factor analysis, levels of public trust in the financial sector, monetary authority, financial institutions, financial services Formulas: 4; fig.: 6; bibl.: 32.
doi:10.55643/fcaptp.1.42.2022.3735 fatcat:trevwarvuzdxboadrqwcoytinm