Drivers of trust in the ECB during the pandemic

Trust in the European Central Bank (ECB) is vital. However, little is known about trust in the ECB during the COVID-19 pandemic. We use the rich pilot microdata from the ECB Consumer Expectations Survey during 2020–2021 on six key euro area countries to shed light on trust in the ECB during the pandemic. Our findings suggest that there is ample room to improve consumers' trust in the ECB. Personal COVID-19 experiences play a role: respondents who reduced the number of hours worked due to COVID-19 have lower trust in the ECB than those with unchanged working hours. Trust in the ECB varies within countries. It is highest among males and people with a good financial situation. It increases with financial knowledge, education, income, and wealth.

Not All Data are Created Equal - Data Sharing and Privacy (preprint)

The COVID-19 pandemic has increased our online presence and unleashed a new discussion on sharing sensitive personal data. Upcoming European legislation will facilitate data sharing in several areas, following the lead of the revised payments directive (PSD2), which enables payments data sharing with third parties. However, little is known about what drives consumers’ preferences with different types of data, as preferences may differ according to the type of data, type of usage or type of firm using the data. Using a discrete-choice survey approach among a representative group of Dutch consumers, we find that next to health data, people are hesitant to share their financial data on payments, wealth and pensions, compared to other types of consumer data. Second, consumers are especially cautious about sharing their data when they are not used anonymously. Third, consumers are more hesitant to share their data with BigTechs, webshops and insurers than they are with banks. Fourth, a financial reward can trigger data sharing by consumers. Last, we show that attitudes towards data usage depend on personal characteristics, consumers’ digital skills, online behaviour and their trust in the firms using the data.

Has the COVID-19 pandemic affected public trust? Evidence for the US and the Netherlands (preprint)

Using two large-scale surveys among households, we examine the drivers of trust in banks, insurance companies, BigTechs, and other people in the United States and the Netherlands, and analyse whether the COVID-19 pandemic has affected public trust. Our results suggest that the COVID-19 pandemic did not have much effect on trust in financial institutions in the US and the Netherlands. However, trust in BigTechs and trust in other people declined in both countries, especially in the US. Our regression results show that the relationship between respondents’ characteristics and (changes in) trust differs across the US and the Netherlands, but for both countries we find evidence that individuals with poor health have lower levels of trust than healthy people, and that trust among poor-health respondents dropped more during the pandemic.

Determinants of Trust in Banks' Payment Services During COVID: An Exploration Using Daily Data (preprint)

Trust in banks is key, especially in turbulent times. Using unique daily payment diary data for a representative panel of Dutch consumers, which has been enriched with questions on trust in banks' payment services, we examine the determinants of trust as well as to what extent the COVID-crisis has affected trust. We have the following main findings. First, narrow-scope trust (trust in consumers' own bank payment services) is in general higher than broad-scope trust (trust in banks' payment services in general). Second, COVID-19 measures have affected trust in banks' payment services. The first lockdown and measures taken by banks - such as increasing contactless payment limits - increased narrow-scope trust and broad-scope trust. The second lockdown decreased both notions of trust. The crisis measures impacted the trust of the elderly the strongest. Third, personal characteristics are significantly related to trust in banks' payment services. We find that both types of trust are increasing with digital literacy and the ease of getting by with income. Also, people who hold an account with a large bank have higher broad-scope trust, while customers of small banks have higher narrow-scope trust. Men have lower broad-scope trust, while there is no difference between men and women for narrow-scope trust. People with high income have higher broad-scope trust, while there is no effect on narrow-scope trust.

Pandemic Payment Patterns (preprint)

COVID-19 has temporarily changed the relative cost and benefits of different payment methods: cash has become more costly in terms of health risks, ease of use and likelihood of acceptance, whereas debit card usage has become less costly. As a result, consumers have shifted away from cash. For some, this may speed up the adoption of electronic payment methods, resulting in a permanent change in payment behaviour. Others will return to their preferred payment method once the influence of COVID-19 on our health and daily lives has faded away. Based on unique payment diary survey data collected among a representative panel of Dutch consumers, we study the shift in payment behaviour and payment preferences during the first phase of the COVID-19 pandemic. Since the start of the lockdown in the Netherlands the likelihood of debit card usage at the expense of cash has increased by 13 percentage points. About 60 percent of this shift has persisted seven months after the start of the pandemic in the Netherlands and appears to be longlived. Also, the pandemic has resulted in a shift in payment preferences towards more contactless payments. Both effects are largest for elderly people.

Pandemic Payment Patterns (preprint)

COVID-19 has temporarily changed the relative cost and benefits of different payment methods: cash has become more costly in terms of health risks, ease of use and likelihood of acceptance, whereas debit card usage has become less costly. As a result, consumers have shifted away from cash. For some, this may speed up the adoption of electronic payment methods, resulting in a permanent change in payment behaviour. Others will return to their preferred payment method once the influence of COVID-19 on our health and daily lives has faded away. Based on unique payment diary survey data collected among a representative panel of Dutch consumers, we study the shift in payment behaviour and payment preferences during the first phase of the COVID-19 pandemic. Since the start of the lockdown in the Netherlands the likelihood of debit card usage at the expense of cash has increased by 13 percentage points. About 60 percent of this shift has persisted seven months after the start of the pandemic in the Netherlands and appears to be long-lived. Also, the pandemic has resulted in a shift in payment preferences towards more contactless payments. Both effects are largest for elderly people.