How banks and insurers earn back customer trust, and why it pays

Trust in financial providers is low. In a 2025 Eurobarometer survey for EIOPA, the EU’s insurance and pensions authority, 45% of EU adults said they trusted banks to ensure a good consumer and retirement outcome, against 53% for insurers. In Cyprus the figures were 44% for banks and 51% for insurers, and just 34% for pension funds, the lowest in the EU, although the Cyprus sample was small at 503 people[1].

This guide is for banks, insurers, wealth managers and family offices. It sets out why trust is worth money, what breaks it, and what rebuilds it.

Why trust pays

Customers who trust their bank stay. Using Italian household data, ECB economists found that one more point of trust in the main bank, on a scale of one to ten, was associated with a fall of 1.9% to 2.3% in the probability of switching banks[2].

They recommend you, and forgive you. A review of the research by economists at the Dutch central bank, later published in the Journal of Economic Surveys, reports that the likelihood of recommending a bank depends on trust in it, and that trusting customers “tend to ‘forgive’ a negative experience and perceive it as an exception”, while for customers with low trust “a negative experience may be perceived as a ‘proof’ that the bank cannot be trusted”[3].

Lost trust rarely comes back. In a study of a run on an Indian bank, published in the American Economic Review, “depositors who run do not return back to the bank”[4].

Bad news travels through the local press. A 2025 US working paper, not yet peer-reviewed, found that after bank enforcement actions were reported in local news, “higher-quality borrowers exit sanctioned banks”, while borrower quality showed little change “in regions without local news outlets”[5]. What the media says about you shapes who stays.

For investment business, trust is the precondition. “Less trusting individuals are less likely to buy stock and, conditional on buying stock, they will buy less,” found one widely cited study[6]. Another, a theoretical model, shows how trust “allows managers to charge higher fees to investors who trust them more”[7], which is also why regulators now watch value for money so closely.

What breaks trust

In banking: fraud, fees and closed accounts

The European Banking Authority names payment fraud “the most significant issue for EU consumers”. Payment services drew the most complaints, with unauthorised transactions and fees the leading reasons, and payment accounts came second, mostly over closed accounts and denied access. On account closures, the EBA points to “a lack of (prompt) communication from the provider about the denial/suspension/closure of the account and reasons thereof”[8].

Fraud is costly for customers too. Payment fraud across the European Economic Area reached €4.2 billion in 2024, and customers bore around 85% of the losses on credit transfers, mainly from scams that tricked them into making the payment[9]. In Cyprus, the Central Bank recorded “a notable increase in phishing/smishing fraud incidents” in 2025, with fraud-related reports rising from 7 to 27[10].

In insurance: claims

Claims are the moment an insurer proves its promise. In EIOPA’s Eurobarometer, 62% of EU policyholders were satisfied with how claims were handled and 17% were not. Among the dissatisfied, the top reasons were a payout lower than expected (23%), a claim that took too long (22%), an unhelpful or unresponsive service (21%) and unclear terms that led to an unexpected denial (20%). Cyprus did better than most, with 71% satisfied[1].

EIOPA’s own monitoring shows claims handling accounted for 52% of non-life complaints handled by insurers in 2024, and rates the issue as increasing[11]. It also warns that, where unit-linked and hybrid products give poor value, failure to address the issues “may lead to wider trust issues”[12].

In complaints: the test customers remember

How a firm handles a complaint is the clearest signal of whether it can be trusted. In Cyprus, the Financial Ombudsman received 377 complaints in 2025, 24.6% fewer than in 2024; 93 were against banks, mostly over overcharging on loans. The office cautions that a fall in complaints does not necessarily mean fewer problems in the market. Since 2015, it has issued 2,272 decisions in the customer’s favour, and firms accepted the decision as binding in only 25.10% of them, 28.85% for banks. In 2025, banks accepted 21 of the 40 decisions that went against them[13]. Accepting a decision is voluntary under the law, but customers see the choice.

In the UK, a mature comparison, the Financial Ombudsman Service received 214,600 complaints in 2025/26 and upheld 30%, and fraud and scams accounted for 18,900 of the 32,900 complaints about current accounts[14].

What rebuilds trust, in six steps

1. Be the first to warn, and explain what has changed

Customers who lose money to a scam remember whether their bank warned them. New rules give you something concrete to explain. Since 9 October 2025, euro-area payment providers have had to check that a payee’s name matches the account before a transfer, free of charge[15]. Under the payment services deal agreed in November 2025, still awaiting formal adoption, where a scammer poses as a bank employee “the PSP must refund the full amount as long as the customer reports the fraud to the police and informs their PSP”[16]. Tell customers what these changes mean for them, before the next fraud wave. Our guide on how to turn a regulatory change into a reason clients trust you sets out the method.

When you refuse, suspend or close an account, say so promptly and give the reason you can, as the EBA expects[8]. Silence turns a compliance decision into a broken relationship.

2. Pay claims as promised, and explain every decision

Each reason for dissatisfaction in EIOPA’s survey is something an insurer controls: set realistic expectations of the payout, give a timetable and keep to it, ask for each document once, and write policy terms a customer can understand before they need to claim. Our guide on how to explain financial products in plain language covers the writing.

3. Treat every complaint as the trust test it is

Settle early where the customer is right, and accept fair decisions from the ombudsman. The Cyprus Ombudsman urges firms “to show greater cooperation and flexibility” in handling complaints (our translation), for faster and more effective amicable settlements[13]. For lenders, the new Consumer Credit Directive adds a duty from 20 November 2026 to “exercise, where appropriate, reasonable forbearance before enforcement proceedings are initiated”[17]. Explain those options to borrowers in difficulty before they have to ask.

4. Help people understand money, with nothing to sell

Customers look for guidance they can trust before they read your offer. Social Shield Cyprus, a Greek-language platform whose partnerships Unita Media manages, opens its guide to rights at the bank with “Δικαιούσαι να ξέρεις τι πληρώνεις” (you are entitled to know what you pay), and tells readers to read their annual statement of fees because it shows what they pay without noticing[18]. Its analysis of Cypriot banking since 2013 calls for more financial education, “banks, the state and society together, so that every customer understands what they sign” (our translation)[19]. Our guide on how to run a CSR programme that earns trust covers how to structure a programme.

5. Put named experts in front of the public, and be ready for bad news

If local news shapes which customers stay[5], the public face of your institution matters. When rates move, fraud spikes or a rule changes, customers and journalists look for someone who explains it plainly. Give them a named economist, risk or claims specialist with a record of sourced commentary, and prepare your spokespeople for the difficult interview before you need one. Our guide on how to prepare your spokespeople so every interview builds trust shows how.

6. For wealth clients, earn trust before the first meeting

Private banks, wealth managers and family offices are chosen on trust long before a mandate is signed. Show how you think, under your experts’ names, in the places wealthy clients already read. Our guide on how to reach high-net-worth investors with content they trust sets out the approach.

A checklist for rebuilding trust

1. Measure trust and complaints by product, not only satisfaction.
2. Warn customers about current scams before they hit, in plain language.
3. Explain verification of payee and the coming fraud refund rules.
4. Give a prompt reason whenever you refuse, suspend or close an account.
5. Set realistic payout expectations and a claims timetable, and keep to it.
6. Ask for each claims document once.
7. Rewrite policy terms that cause unexpected denials.
8. Settle fair complaints early, and accept fair ombudsman decisions.
9. Offer forbearance options to borrowers in difficulty before enforcement.
10. Support financial education that carries your name and sells nothing.
11. Put named experts in front of the public, and rehearse the difficult interview.
12. For wealth clients, publish your thinking where they read, under your experts’ names.