Sources of trust in the financial system and the process of their institutionalization

Introduction. Trust is considered primarily a sociological and psychological category that is gradually becoming a basic concept of economic science and has a significant impact on economic processes and therefore needs to be studied with special economic tools. Each person’s trust is formed under the influence of various factors, depending on the propensity to take risks, level of education and culture, emotional condition, belonging to different social groups, expected usefulness , etc. Therefore, trust is a rather complex and multifaceted factor of economic development that acts in several directions: it helps stimulate investment, supports the development of competition and entrepreneurship, and is a form of social capital capable of uniting society and creating preconditions for long-term economic growth. Problem Statement. In the current context of globalization and rapid digitalization of the economy, rethinking the socio-economic aspects and functions of trust is of particular importance. It is necessary to clarify its role in the new realities and develop effective mechanisms that will contribute to the institutionalization of trust at the state level as a key factor of stability, development, and cooperation in society. Purpose. To identify the sources of trust in the financial and banking system in modern conditions and to propose specific mechanisms for their institutionalization. Methods. In the course of the study, the abstract-logical method and methods of analysis, synthesis, grouping, description, comparison and theoretical generalization were used. Results. The stages of trust formation are defined, in particular: expectations, bases formation, consolidation, development and preservation, as well as destruction or loss of trust, processes that contribute to its formation in the financial and banking system. The sources of trust formation are systematized, and the factors and specific measures that foster institutionalization of these sources are identified. An example of the structure of the sources of formed trust is demonstrated, which in each individual case is formed in its own unique proportion. Conclusions. When conducting further research on the level of trust, it is important to determine not only the general level of trust, but also the sources of its formation, as they can differ significantly for each person. An important aspect of building trust at the state level is its institutionalization, as it leads to predictability and orderliness of economic life in society, increasing its sustainability, helps minimize risks, protects against unpredictability, and provides highly organized forms of interaction between entities in the financial sector.