Ethics in FinanceThere are few industries out there which havetaken a bigger hit in the ethics department thanfinancial services. …
The Financial Industry Notorious for seeming to be out of touch with the general public, financial organisations have seen their public perception and reputation drop even further in the wake of various scandals. Incidents like the LIBOR rigging, money laundering and PPI has damaged the trust instilled within the financial industry, leading to growing question marks over the trust and ethical stance of financial organisations. What has happened to the financial industry to warrant this?
Out of Touch FinancialIndustry Perceived public image – one of being out of touch with the common man. The emphasis for business appears to have switched from customer care and money management in to a strategy of revenues, growths and bonuses. Lack of interest or care towards their clients has significantly damaged client satisfaction and led to a reputation for being self- absorbed and callous. An environment of conflict, deceit and uncertainty has developed where relationships are stronger between managers and advisers than they are between adviser and client.
Disconnected from Society Major financial organisations have lost track of its role and duty in wider society. Traditionally seen as a pillar of safety and dependence, financial institutions served to aid in the growth and development of its clients, not itself. This overarching theme of service and customer care has been lost – replaced with a need for revenues, profits and personal growth.
Consequences? The consequence of this change in attitude is a major fall in confidence and trust. The public are wary of investing in savings, fearful of little or no returns, preferring to protect their money from financial fluctuations by using cash and bonds. This lack of investment has a wider concern with financial services being less able to lend money out, due to the shortage in capital, stifling the economic growth needed to boost confidence of savers and investors. The industry faces significant problems in corporate PR
How to Prove EthicalAuthenticity More needs to be done to establish genuine change and build a truly ethical transparent industry. All financial organisations must commit fully to an industry wide code of conduct and clear ethical standards. Those which fail to adhere to these standards should be named and shamed. Organisations can provide training on business ethics and ethical decision making Staff members should act with professionalism and integrity at all times to promote a positive image for the company. Organisations can organise events and write papers on business ethics, Financial organisations must make a visible and conscious effort to place clients before themselves. Returning to a client led business plan, where the client’s wellbeing and interests is the top priority, will help to re-establish trust from the general public.