Trust in Fintech: Endorsements' effectiveness in establishing consumer trust

Abstract: Trust in the financial industry is low and has been for quite some time. Yet, trust has been found to be crucial to facilitate consumer engagement in the industry. With the shift to digital, the primary way to build trust for financial services companies - face-to-face interaction - is taken out of play. In addition to this, the effectiveness of financial services companies' own communication in generating trust has experienced a diminishing effect over the last decade. With the fintech sector's great potential to disrupt the financial industry, the question of how to establish trust becomes burning hot. Third-party recommendations have been proposed as a key way of establishing trust when the first-hand experience from a financial service is absent. Therefore, this study set out to investigate if and how endorsements are effective in generating trust. Building on the consensus among academia concerning endorsements' effectiveness to influence consumer attitudes, the study investigated the effectiveness of the three main endorser types: celebrities, experts and typical consumers. By using the Elaboration Likelihood Model, the paper sheds light on how attitudes appear to be formed when consumers are exposed to a message of a fintech company with an endorsement. Further, it examines if there is relative strength in the different heuristics proposed by the ELM, which the endorser types are seen as embodying. By utilizing a quantitative experimental design, the paper identifies that a specific endorser could be perceived as a positive argument, but that the strength of this perception is not enough to generate strong sensations of trust. The authors conclude that the effect endorsements have when communicated through text, is not enough to significantly change consumer attitudes of trust in relation to when no endorsement is being made.