1. Ethics in Finance
There are few industries out there which have
taken a bigger hit in the ethics department than
financial services. …
2. 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?
3. Out of Touch Financial
Industry
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.
4. 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.
5. 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
6. How to Prove Ethical
Authenticity
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.