The banking system and the role of trust
11/09/2022
2 min
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What role does trust play in the relationship between the French and their banks? Jérémie Bertrand, professor of finance at IÉSEG, takes stock of the situation.
Why is trust important in the banking system?
Confidence is essential because we are dealing with their core business: asset transformation. A bank will transform short term deposits, which we want to be able to dispose of when needed and without risk, into long term loans, carrying a higher risk. The bank’s role is to provide loans to its customers while at the same time minimising the risks it shoulders, and to do this it must assess the borrower’s profile as best it can.
This assessment is made using the information that one transmits to one’s bank. Now, this information is of two main types: quantitative data, our salary for example, which is rather simple to analyse, and qualitative analyses, our motivations, which are much more complex to obtain, but much more reliable for the analysis. Thus, qualitative information allows the bank to make a better analysis of its clients, but in order to obtain this, it is necessary to develop an important element: the trust between the client and the bank.
Read the full interview in the latest edition of Change Magazine:
This magazine aims to be an information tool, thanks to the range of expertise of our professors and the informed opinions of our professional partners in relation to current themes. This tool aims to deliver ideas and reflections to its readers, in order to cultivate their daily lives and their perception of the challenges facing the companies of today and tomorrow.
Jérémie Bertrand is Professor and holds a Ph.D. in Management Science from the University of Lille, specializing in Finance, and his research interests include the relationship between banks and their customers (relationship banking), the consequences of trust for banks, and the impact of the psychology of individuals on their financial decisions.
