Having recently got around to watching Leonardo Dicaprio's 'Wolf on Wall Street' I started to ponder on what has really changed since the 2008 financial crisis? Have the images of the wolves like Jordan Belfort really changed? Are the public actually starting to restore their faith in these people/institutions?
Banks have started to act towards addressing this concern by hiring an increasing number of compliance officers. For example, JP Morgan has hired an additional 13,000+ people in the area of compliance since 2012.
I have to admit when looking at the banking compliance system and how they are evolving policy and regulation I start to glaze over...where do you begin? However I am a customer of a bank, and I pay taxes so surely I must be important enough to understand what they are changing for my best interests right?
I hear more stories about the growing concerns of mental health issues such as depression leading to suicide from employees inside financial institutions, let alone the untold stories. The levels of suicide are also rising with people who are unemployed and dealing with financial struggles just to survive. I know through my own experiences, years of research and talking to others that the banks have overlooked the missing jigsaw piece - benevolence.
Do not get me wrong I believe banks play a vital role in our economy, they are a business set up to provide value to their clients. I am merely asking the question "where has the morality of care gone?"
Research has demonstrated that in order to gain trust you must be able to show three core elements.
Ability (are you competent?)
Integrity (are you honest?)
Benevolence (do you care about my interests?).
According to David De Cremer bankers don't believe benevolence exists in their profession as it is not necessary! However I definitely agree with David when he refers to trust only being successfully built when clients feel that their best interests are at the heart of the banks actions. It is imperative that banks are able to connect with their clients on a personal level. Unfortunately, banks are increasingly investing in the efficient use of IT applications, and as a consequence are removing the personal element necessary for true benevolent interactions with clients.
A clear example can be seen through a lady I recently spoke to whose mother was the sole survivor of her family during world war two in Poland. Her mother was an inspirational lady who fled to the UK for safety, leaving all her money and possessions behind. The challenge to get a job was proving almost impossible, but she had a skill as a seamstress and decided to set up on her own. All that she needed was a £25 loan and so she walked into a bank to ask. The bank manager invited her to join him for a cup of tea where she had the opportunity to share her story and ask how she could receive the loan to achieve her goal. The manager was very compassionate and believed in her, the result was that the lady was awarded the loan which was paid back very quickly. She went on to be very successful, however she made a decision to never change bank because of the very first conversation with that bank manager. This resulted in the bank winning a very loyal customer for over 60 years.
When speaking to Madan Pillutla, a professor at the London Business School we both agreed that there is a fundamental flaw in judgements made by people in business. Research suggests that when an individual judges themselves, the main focus sits with competencies and integrity, however when judging another person/organisation the main focus of judgement is human behaviour. Therefore measuring X versus Y does not make sense. It tells me that a brand taking more personal responsibility for ones actions is more vital than ever.
So when referring back to the banking sector, observations and questions arose. We made the assumption that the banks have been very successful in recruiting very best of intellectual graduates with high IQ levels, they have the competencies to design complex financial strategies and models that proves to be very attractive to the financial world. I have to be honest I struggle to understand myself, (yet) how many others are thinking like me? Could it be that these highly intellectual employees have forgotten how to communicate with their customers, who may not necessarily understand the financial jargon that they (the financiers) are used to operating on? Is it possible that bankers feel that communicating at the level of their customers would be a waste of time? How are they evaluating their behaviour Has this trail of repetitive behaviour brought about the distance between 'us' and 'them'? If so is it any surprise the banks have failed to earn the trust of the consumer?
Until the board and top management, model the value of benevolence as something to demonstrate, not just talk about, levels of trust will remain low. If you are interested learning more about measuring and growing the 'morality of care' between the stakeholders in your business contact Ethical Value and book a consultation today.