Proper Banking Etiquette: What is Next?
Posted on Sun, Nov 28, 2010
by Jeremy Willinger
In today’s economy, especially after witnessing the implosion of the banking industry, many feel that once-trustworthy bankers do not have the interests of the average investor at heart. Between Bernie Madoff, Lehman Brothers, Wachovia, Capital One, JPMorgan Chase, Goldman Sachs, there has been no shortage of newsworthy developments to inflame cynicism and create a prevailing attitude that banks not only exploited consumers’ trust, but were richly rewarded for that behavior.
How is Main Street supposed to have confidence in Wall Street after witnessing not only rapidly dwindling returns but a taxpayer-funded bailout to keep them afloat? The onus is on both lender and customer to rebuild this fractured relationship. Simply avoiding financial institutions is not an option—businesses need these companies to set up shop, expand, and hire new employees once successful. While companies that make home safes are reporting a 25 percent increase in sales, one of the bright spots in a troubled economy, the solution for individuals will never be stashing retirement funds at home—in either safes or mattresses.
Banks must now redouble their efforts to restore integrity and positive public perception. Moving beyond improved customer service for private investors, banks need to leave behind their old philosophy and change their entire way of doing business (which seems to have been making money for themselves while ripping off customers).
At its core, this is a return to unimpeachable business etiquette, customer service, where building and fostering business relations is based on integrity, best practices, and regional sensitivities. This will not be an instantaneous process—trust is a state that cannot be restored overnight.
Consumers need to understand in exactly what—and with whom—they are investing, and feel confident that they are making the right decision. Further, they need to understand that though they may have invested through a financial institution, they must be the ones who are making responsible decisions to the best of their ability. Above all, investors must remember, as so many disclaimers tell us, that past performance is no guarantee of future results.
The rules of proper business etiquette teach us, among other things, to offer only reliable advice that keeps our customers’ best interests as the priority. Banks of the future will have to heed this rule more than any other as they rebuild the loyalty that evaporated along with the balance of our 401Ks. Consumers need to look for better alternatives: small community banks where people come first, then money, then things...and where ripping off the consumers is not business as usual!
Wachovia is ordered to pay 203 M for deceiving customers:
Banking Etiquette: Lessons in integrity