Determinants of individual customer trust in physical banking: case of the Baltic States

Abstract

This research paper focuses on customer trust in physical banking. Main six determinants of trust in physical banking were distinguished on the basis of scientific literature: information provided to clients, risk perception of clients, quality and availability of bank services, bank characteristics, bank employees, and customer experience with other financial institutions. These six determinants and their relationship with customer trust in physical banking in all three Baltic States were researched. A questionnaire, correlation and regression analysis were employed as scientific methods. Research results show that the main determinant of customer trust in physical banking is information provided to customers, being followed by customer risk perception. Empirical findings also suggest that Estonian customers have the highest financial literacy level among the Baltic countries, being followed by Lithuania and Latvia respectively.