The growing importance of increasing business performance through intangible assets has been recognized in theory and practical experience. Trust as one of them is a natural and essential component of relationships (Sheppard/Sherman 1998, p. 422). Trust facilitates both consumer loyalty and customer retention, but also compensates for information asymmetries, reduces transaction costs, and lowers perceived risk (Picot et al. 2003; Ripperger 1998). Marginal changes in loyalty (e.g., 5%) disproportionately affect changes in profitability (25% - 100%; see Reichheld et al. 2000). Consequently, trust has an immense impact on organizational performance.
KeywordsBanking Industry Trust Model Intangible Asset Reduce Transaction Cost Customer Retention
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