Canada's financial services industry has a trust problem

But perhaps Canadians are just becoming less trusting overall as report highlights issues across media, government, and business

Canada's financial services industry has a trust problem
Steve Randall

One of the greatest assets any person or organization can have is the trust of others.

But it seems that Canadian institutions are struggling to maintain the trust of consumers who are increasingly questioning the ethics and competence across all sectors.

The 2020 Edelman Trust Barometer shows that trust in Canadian governments, media, business, and non-governmental organizations (NGOs) has fallen over the past year. And this is despite low unemployment and rising stock markets.

Perhaps this is born out of fear; the study shows that more than three quarters of Canadians are worried about losing their jobs from technological changes, a looming recession, or jobs being moved out of Canada.

Ethics and competence
To have trust in an organization, Canadians need to see both ethics and competence; but the study shows that they did not find both in any one institution.

And when asked about their financial future, just 1 in 3 felt their family would be better off in 5 years’ time.

"The characteristics that made for a trusted institution in the past are not the ones that make a trusted institution today," says Lisa Kimmel, president and CEO, Edelman Canada and Latin America. "Canadians want leaders of institutions to look beyond shareholders to consider stakeholders like employees. Ultimately, the battle for trust hinges on integrity, dependability and purpose. Institutions must demonstrate an ability not only to perform competently but also to do so ethically, by taking concrete action to tackle the right issues, in the right way."

Financial services
The research shows the levels of trust that Canadians have across key sectors.

Financial services sits towards the bottom end of the scale with 56% saying they trust the industry, down 8 percentage points from 2019. This puts the industry between telecoms (52%) and consumer packaged goods (57%) but well behind technology (68%) and professional services (67%). Education ranks the highest (70%).

Asked about individuals, scientists score the highest at 83% while CEOs score 42% along with government leaders, and ‘the very wealthy’ score just 33%.

There is also uncertainty about where to turn to for quality information, with half of Canadians believing that the media they use is contaminated with untrustworthy information and a staggering 71% worrying about fake news being used as a weapon.

Harmful capitalism
Declining trust is not simply a Canadian problem; the report shows that there are several factors that are common across every developed market.

 “We are living in a trust paradox,” said Richard Edelman, CEO of Edelman. “Since we began measuring trust 20 years ago, economic growth has fostered rising trust. This continues in Asia and the Middle East but not in developed markets, where national income inequality is now the more important factor. Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid.”

Most global respondents do not expect to be better off in 5 years’ time and fear losing their jobs, while 56% think capitalism in its current form is doing more harm in the world than good.

That said, business is seen as the most trusted institution (58%).

“Business has leapt into the void left by populist and partisan government,” said Edelman. “It can no longer be business as usual, with an exclusive focus on shareholder returns. With 73% of employees saying they want the opportunity to change society, and nearly two-thirds of consumers identifying themselves as belief-driven buyers, CEOs understand that their mandate has changed.”