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Trust, in some form, is at the center of all financial transactions, and technology can enable and enhance that trust.

How do we know? Because 50% of retail investors and 87% of institutional investors say greater use of technology in financial services has increased trust in their adviser/manager. That’s among the key findings of “Enhancing Investors’ Trust: 2022 CFA Institute Investor Trust Study,” the fifth edition in the biennial series.

Enhancing Investors’ Trust” zeroes in on the relationship between technology and trust in finance. It demonstrates that trust in financial services is both seen and unseen: It is the ever-present backbone of financial transactions and the outward interface through which those transactions are conducted. 

Greater tech integration in finance helps establish two kinds of trust that are essential to investing: “execution trust” and “relationship trust.” The former refers to the knowledge that transactions are secure, accurate, and appropriately managed, while the latter describes the additive value better investing tools and product personalization create for investors.

Technology improves access to financial markets and strengthens representative equality among different market participants. It drives the development of new products and services that open up the markets to more people and counteracts the trust divide, or the trust differential among retail and institutional investors, across geographies and demographics, and between retail investors with and without an adviser.

Execution Trust and Fundamentals

Execution trust encourages market participation, and all market participants, regardless of demography, require it. By fostering execution trust, technology bridges the trust divide among all types of investors and helps ensure a level playing field.  

As the World Bank observes:

“Fintech can democratize access to finance and the world can move closer to achieving financial inclusion. . . . Fintech has the potential to lower costs, while increasing speed and accessibility, allowing for more tailored financial services that can scale.”

Globally, the first point of entry to financial services is often digital payment providers. In some markets, particularly those that lack traditional banking infrastructure, they are the primary mode of transaction. As such, trust in digital payment providers — Apple Pay, Venmo, Alipay, Zelle, etc. — was ranked highest among all financial services industry subsectors in most markets.


Trust in Digital Payment Providers*

Chart showing survey results on Trust in Digital Payment Providers
Source: “Enhancing Investors’ Trust
Note: The exhibit shows the percentage of respondents selecting 4 or 5 on a scale of 1 (completely distrust) to 5 (completely trust).
* “China” refers to Mainland China.

Retail trading accounts and apps are further addressing the disparity in access to financial services. The survey found that 71% of respondents believe these tools improve their understanding of investing. Institutional investors are equally bullish: 89% say that they increase trust in financial information. These developments directly influence industry sentiment: Respondents with retail trading accounts are more than twice as likely to say they trust financial services than those without them. 

Trust Study Tile

Relationship Trust and Personalization

Relationship trust is an additive value that builds on execution trust and describes what advisers can deliver when they understand, connect, and align with a client’s personal values and motivations. As with retail trading accounts, whether an investor has an adviser influences how much they trust financial services. Of those with an adviser, 69% have high or very high trust in financial services compared with 45% of those without an adviser.

Technology can guide the form and frequency with which advisers communicate with clients and help them adapt accordingly to provide the right information at the right time for each client. It also can facilitate the development of more tailored products. Ultimately, technology-fueled personalization — direct indexing, AI investment strategies, etc. — strengthens the connection between investors and the investment industry.

Demand for such products is high. The survey found that 78% of all retail investors and approximately 90% of those under age 45 are interested in more personalized investment products and services.


Percentage of Respondents Who Want More Personalized Products/Services to Better Meet Their Investing Needs, by Age Group

Source: “Enhancing Investors’ Trust

Implications for the Future

That financial technology adoption skews toward younger investors is no surprise, but as more assets are held by these “digital natives,” technology integration becomes ever more embedded in the client–adviser relationship. This influences how investors participate in the markets overall. For the first time in the Investor Trust series, access to the latest technology platforms and tools was cited as more important (56%) than having someone to navigate and execute the investment strategy (44%).

Financial Analysts Journal Current Issue Tile

As trust increases in financial technology, so too does the potential for new financial product and services providers to enter the market. The survey found that 56% of retail investors would be more interested in investing in financial products created by Amazon, Google, Alibaba, and other large technology firms than by financial institutions. 

Of course, technology’s ubiquity in financial services creates certain challenges. Data privacy is a key consideration. More than one in four respondents (27%) say they are less willing to use online platforms that require inputting personal data than they were three years ago. Technology’s behavioral effect is another concern: Of survey participants with a retail trading account, 57% say it increased their trading frequency, while 74% say they believe acting upon digital “nudges” will improve their investment performance/decision making.

Of course, such cautions are necessary reminders that unchecked technology can have unintended consequences. That’s why tech integration in finance must be approached with intent and oversight to maximize its trust-building effects on the industry.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images/Ilya Lukichev


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Ryan Munson

Ryan Munson is a research program manager at CFA Institute. He is the author of several CFA Institute publications, including the Future of Work in Investment Management series. He holds an MBA and MS in business analytics from the Kelley School of Business at Indiana University and a BS from the University of Virginia.




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