aalto1 untyped-item.component.html
Building investor trust in digital-only banking startups
Loading...
URL
Journal Title
Journal ISSN
Volume Title
School of Business |
Master's thesis
Electronic archive copy is available via Aalto Thesis Database.
Authors
Date
Department
Major/Subject
Mcode
Degree programme
Language
en
Pages
60
Series
Abstract
This thesis explores how investor trust is formed towards digital-only banking startups, an area that remains underexplored despite its growing relevance in the rapidly evolving financial technology sector. The study addresses the specific challenges digital-only banks face in gaining investor confidence, particularly in environments that are characterized by regulatory complexity and fast-paced technological change. The study addresses the following research question: How is investor trust formed towards early-stage digital-only banks? The empirical analysis is based on seven semi-structured interviews with industry investors and experts.
The findings reveal five key dimensions that influence investor trust: structural prerequisites, the credibility of the founding team, the impact of endorsements and external validation, the quality of investor communication, and the perception of risk and trust fragility. These dimensions are analyzed using Mayer et al.'s (1995) integrative model of trust, which serves as the central theoretical framework in the study.
Based on the empirical findings and theoretical insights, the study proposes a new conceptual framework for investor trust formation in digital-only banking startups. The framework illustrates that investor trust is built step by step through three types of signals, which are structural, behavioural and borrowed signals. The framework offers both theoretical and practical contributions by integrating established trust theories with empirical findings. It provides a strategic model for digital-only banking startups to proactively construct and manage investor trust in environments that are characterized by regulatory complexity, uncertainty, and rapid technological advancement.