It is not about rebuilding customer trust in the financial institutions, it is about building trustworthy financial institutions which customers can trust!

It is fair to say that trust in financial services has fallen considerably since the Global Financial Crisis in 2008. At the same time, the public has become increasingly disgruntled with ‘big business’ during the period of austerity as they have not appeared to change their ways in remuneration and the ‘well off’ didn’t appear to be a severely impacted by the downturn. By 2014, this had become so concerning that it drew comment from senior regulators: 

“The public has rarely been more cynical about big business; trust is at an all-time low. Strong and demonstrable ethical behaviour is critical to win back and retain trust among customers and investors.”Sir Win Bischoff, Chairman of the Financial Reporting Council, FT 21 Jul 2014

Andrew Bailey, Chief Executive of the Financial Conduct Authority (FCA), gave a speech in October 2018 on trust and ethics in finance. He identified the revealing of serious conduct problems in too many areas of financial services in the wake of the financial crisis as severely damaging to any sense of trust. 

Andrew talked about the moral and ethical dimensions to trust, and of course the requirement for commitment. Commitment has to be delivered upon to build trust. All companies make general commitments when trying to entice us to become customers, but how often do they deliver upon them? How often do we seek a new service if they don't? Once a customer, it is often easier and more convenient to remain loyal (we talked more about that with regards to fair pricing here) – but that doesn't always compel businesses to deliver upon their commitments.

Andrew had little doubt that prior to the financial crisis, an 'anything goes' culture prevailed. For financial services this was evident in the advocacy of light touch regulation. He said many held the view that firms would succeed, and the whole public interest would benefit. But that is not what happened, hence the call post crisis for greater regulation in the public interest. 

The FCA have therefore shifted the emphasis of regulation towards individuals, particularity people in senior management who should embody ethical standards. Following the work of the Parliamentary Commission on Banking Standards, the FCA have introduced the Senior Managers and Certification Regime. This has 2 clear objectives – driving responsibility and accountability.  

Andrew sees these at the heart of rebuilding trust, driving some rebalancing of responsibility and accountability from the corporate institution to an identified individual, but he recognises these objectives must be internalised by firms and staff – the regulator alone cannot carry this through. 


So how does equals play its part in rebuilding trust, and reinforce it going forward? 

Andrew also said that In Western European countries the Pew Research Centre finds that trust in the military exceeds that in banks and financial institutions, parliaments and the news media(link is external). This view is backed up by the UK YouGov and other poles. 

Therefore, we see an opportunity to build, from scratch, a trustworthy business run by people with a proven track record of fairness and service. 

Where better to start than with the services community, historically misunderstood by financial services, to seek a better relationship between business and customer, while providing better services and products. 

We need to start small and can’t promise to tackle all the issues overnight!