More than seven years on from the financial crisis, concerns about trust and confidence in banks and financial institutions show no sign of diminishing. With the latest series of scandals, allegations and billion-dollar fines, questions are being asked about whether the industry has learnt any lessons. As regulators call on banks to ‘raise their game’ to regain the public’s trust, we ask what can be learnt from our public opinion and stakeholder research about the roots of distrust, the opportunities for re-building reputation, and the pathways to get there.
In the first of a 3-part blog series, we start by setting the context in terms of how global public opinion of the industry has evolved and how far the industry has progressed since GlobeScan and Haas School of Business published The Future of Finance report in 2011.
Evidence of a trust crisis is stark. Research from GlobeScan, Edelman and others continues to feed the debate about challenges and solutions for the banking sector.
GlobeScan’s research across 24 countries shows the public’s net trust in banks and financial institutions deep in negative territory, alongside that of oil companies. Attitudes range from highly positive in Africa and some parts of Asia, to profoundly negative in Europe and the United States.
Ethics lies at the core of the trust deficit. The chart above shows that operating ethically is the most important issue that the industry needs to address. Customer service and price are almost always top-of-mind issues in consumer surveys – in this case however, they sit below ethical concerns in importance. And one of the sector’s key societal roles – building a strong economy – has fallen back in importance since 2011.
In The Future of Finance study, published in 2011, we reported that thought leaders view the sector as ‘crucial to a thriving society and economic system’. Opinion leaders had a range of perspectives on the extent of the sector’s role – from a focus purely on responsibly allocating capital, to playing ‘a more proactive role funding and allocating for the public good’. Based on thought leaders’ expectations, the report projected three potential future scenarios: ‘risky business as usual’; ‘back to boring’; and ‘inclusive innovation’.
Since then, we’ve seen significant regulatory tightening but little evidence of change in industry behaviour. It seems that, in spite of increased external pressures and drivers associated with ‘back to boring’, the industry is still beset with the trust issues and challenges of ‘risky business as usual’.
There’s clearly a need for the industry to get its house in order and re-focus on its purpose.
In future blogs we’ll explore the implications of regional differences and set out pathways to building trust and reputation.