The key factors that influence trust in a Swiss family office banking relationship: an explorative mixed-methods study in Swiss private banking

Field: Business, Management and Accounting (Social Sciences)

Trust is without doubt a vital concept in human and business relationships, particularly in the financial services industry. This doctoral thesis advocates that recurrent and value-adding key trust factors exercise an important influence on trust in Swiss family office banking relationships, thereby improving long-term customer relationships. The main significance of this study is that it contributes to new academic knowledge in trust research and relationship marketing with a unique Swiss private banking setting not explored in depth to date in this form. Only a few dissertations in sociology, economics and business administration have their focus on the highest segment of wealthy individuals. \n \nFor this study, a theoretical framework is used in this study that is predominantly based on trust theory, customer relationship management, consumer behaviour and market segmentation. The literature review has revealed that qualitative trust research in a Swiss family office banking relationship context has received limited attention, and clearly warrants more as there is, at least in the critical eye of the general public, a depleted trust in financial institutions. Specific trust can be influenced and is indispensable where risk and uncertainty prevail. The research findings over the years have identified numerous context and culture-specific key trust factors that are of significance in dyadic trust interactions. Trust can reduce information asymmetry and generate premiums for reputable market players. Customer relationship management systems based on key trust factors facilitate long-term customer relationships and are an invaluable resource for monitoring customer satisfaction throughout the various stages of the trust lifecycle. The diffusion of banking innovations can be influenced by important key factors such as reliability and credibility. Consumer behaviour and the decision-making process are enduringly influenced by context-related key factors. The market segmentation of Swiss family offices is important for fulfilling client-centricity and to exceed in expectations due to the distinctive specific needs of Swiss family offices which are a growing and financially powerful client segment of the financial services industry and which have unmatched qualitative needs with respect to trust. These observations lead to the prime research question, which is: \n \nWhat key factors (clusters) influence the sustainability and predictability of trust in a Swiss family office banking relationship, how, why, and at what stage of the trust relationship and diffusion of innovations and in which respective family office market segment? \n \nThis prime research question has been primarily inferred from the theory of trust, customer relationship management, consumer behaviour and market segmentation, and specifically for this study, has been divided into research, interview and survey questions in a two-stage exploratory sequential mixed-methods research design, that consists of both a qualitative and quantitative strand founded on a pragmatist and constructivist research philosophy. Semi-structured face-to-face interviews and an online-mediated survey were used as the instruments for the primary data collection instruments. Two mutually exclusive sample populations were purposefully selected consisting of eleven interviewees and 57 survey respondents out of a total of 245 selected Swiss family offices based on the key informant selection criteria and the ‘Swiss family office puzzle’ segmentation model that is introduced for the first time in this study as to date no official classification exists. The coding procedures of the transcriptions revealed the emergent key trust factors, which were considered by the participants of both the research strands in the perspectives of the four parent disciplines presented in the literature review of this study and refined to the ’30 key trust factors’, which are verified in the quantitative strand of this research. \n \nThe findings indicate the importance of gaining early access to the participants and the allowing of sufficient time for the administration process. The context-rich qualitative data provides insights supporting the importance of a highly dedicated and excelling service quality and the need for best practices in the Swiss family office segments. The ’30 key trust factors’, of which the majority have a qualitative nature, are related to the six emergent core themes, namely the Swiss family office, employees, service, products, the bank and legal and compliance based on the findings from the qualitative data. Triangulation of the two sets of data confirms the importance of the emergent ’30 key trust factors’ within the two sample populations that were used for this study, i.e. in the decision-making process and throughout the trust lifecycle. The top three rated key trust factors in relation to the sustainability, predictability, influence on formation and confidence and information needs are service responsiveness, service quality and fulfilment and the bank’s complete transparency in fees, services and product features. The individual ’30 key trust factors’ have cumulative and multiple positive effects on the different research perspectives presented in this study and predominantly appear in combinations. Specific ’30 key trust factors’ are recurrent, pivotal to the prime stages in the trust lifecycle and sustainably improve results and client future intentions. Swiss family offices in both samples are critical in respect to bank innovations. In relation to the ABI model, findings show that integrity is most important to the sustainability of trust and ability to the predictability of trust. \n \nContributions of this doctoral thesis based on the decision-making process give rise to the managerial guidance tool introduced as the ‘trust zone’, one of the key five elements of the ‘inclusive trust’ framework presented in this study. Implications for managerial practice such as the introduction of a ‘key trust officer’, best practices based on non-monetary evaluative criteria and the introduction of key trust factors within the corporate DNA and proposing the need of a new mindset for Swiss financial institutions based on the findings are considered for managers, academics and financial institutions, whose approach to client-centricity is perceived by the Swiss family offices in both sample populations in need of improvement, as well as theoretical implications and contributions to existing models and improvements in methodology. As for any future research, this doctoral thesis proposes further testing of both the concept of the ‘trust zone’ and the framework of ‘inclusive trust’ using case studies, the introduction and consideration of a Swiss legal definition of a Swiss family office, other ideas for ascertaining a commonly acceptable definition of trust and the initiation of further international studies utilising the key trust factors.