SECURITY OF ELECTRONIC FINANCIAL SYSTEMS AS A MECHANISM FOR BUILDING INSTITUTIONAL TRUST

Abstract

The rapid growth of electronic payments, online banking, fintech platforms, and other digital financial services has made them an increasingly important part of economic life. Their reliability is therefore critical for both individuals and businesses: these systems need to operate continuously, protect funds and data, and process transactions in a predictable way. This article aims to explain how the security of digital financial systems builds trust in financial institutions among individuals and businesses. The study identifies four forms of security: actual, verified, perceived, and experience-confirmed. It also proposes five levels at which security should be considered: technological, operational, algorithmic, institutional, and communication-behavioral.The proposed model explains how security gradually translates into trust. First, a system must provide real protection for funds, data, and transactions. Users must then receive clear evidence that the system is reliable and see that problems are handled properly when they occur. This creates a sense of security and fairness, which in turn strengthens trust in the financial institution, encourages continued use of its services, and ultimately contributes to the resilience of the wider financial system.Technical protection alone, however, is not enough. Trust also depends on whether the system’s reliability is independently verified, how clearly the institution communicates with its customers, whether users remain in control of their financial activities, how disputes are resolved, and how quickly and fairly the consequences of incidents are addressed.The article also proposes examining whether trust is lost faster than it is rebuilt, when additional security measures begin to create more inconvenience than benefit.The practical value of the proposed model is that it brings cybersecurity, operational continuity, customer protection, communication, and trust into a unified framework, rather than treating them as separate areas of the financial system.