Blog posts on trust in financial services
- 1. 1 Samantha Wilding: Blog posts on trust in financial services: 2013-‐14 These were written when I was Sustainable Business Director at Corporate Culture, and published on the agency’s Social Marketing Group on LinkedIn 17th June 2013 Will its ‘ethos’ survive? Ethos: noun, /ˈiːθɒs/-‐ the characteristic spirit of a culture, era, or community as manifested in its attitudes and aspirations. This morning, the Co-‐operative Bank unveiled a rescue plan to tackle the £1.5bn hole in its balance sheet. This comes on the heels of a terrible few weeks for the bank, as it withdrew from purchasing 632 Lloyds branches and saw its ratings downgraded by Moody’s to junk status. Co-‐operative Bank Chief Executive Euan Sutherland commented that ‘there will be no change to our ethos or the way we run our bank’, but others aren’t so sure. BBC business editor Robert Peston commented that ‘the culture and practices of the bank are bound to change once its shares are owned by commercial investors -‐ even though the Co-‐op Group will retain a controlling majority stake.’ Under the rescue plan, capital will be raised by converting bonds (loans to the Group) into shares that are expected to be listed on the London Stock Exchange by October. The Co-‐operative is the only bank in the UK with an Ethical Policy -‐ a public commitment to withhold funding from activities that its customers say are ‘unethical’. This is underpinned by a set of ethical values: Openness, Honesty, Social Responsibility , and Caring for Others. Ed Mayo (Secretary General of Cooperatives UK) neatly sets out in his blog the argument that the bank does indeed remain a ‘cooperative’ (http://edmayo.wordpress.com/). But it raises the question, will the Co-‐operative’s unique community-‐minded ethos survive this change? Or will this rescue plan ultimately undermine what makes the bank special to its staff and customers? 10th September 2013 A new dawn? It has been a summer of appalling headlines for the financial services sector: the Archbishop of Canterbury became embroiled in a row over Wonga, Cooperative unveiled a rescue plan to tackle the £1.5bn ‘hole’ in its balance sheet, and a number of councils took action against payday lenders. In July, the Parliamentary Commission on Banking Standards published its report, Changing Banking for Good, which outlined the ‘radical reform’ needed to improve standards across the sector. All of this has continued to erode consumer trust in the industry.
- 2. 2 Today’s British Social Attitudes Report (http://www.bsa-‐30.natcen.ac.uk/) included the finding that when the survey began in 1983, nine out of ten people trusted banks. That has now fallen to just two out of ten. But there is a new regulatory structure is in place, and some parts of the sector seem to be responding. Yesterday's press was full of coverage around the news that TSB will be returning to the high street, pledging 'to do what is right for Britain' and 'bringing a local banking model' back to the country. And, TSB isn't the only provider aiming to refocus on the customer. Metro Bank launched in 2010, and has grown from 4 branches to 19 across Greater London. The Bank has a commitment to 'offer banking focused on the customer through unparalleled levels of service and convenience'. Will these new developments be enough to create an attitudinal shift amongst consumers? Pledging to ‘do what is right’ is all very well – my guess is that consumers will be waiting to see action. 17th January 2014 Dreaming of Bedford Falls.... Ed Miliband is speaking today on the Labour Party’s proposals to ‘curb the power’ of the UK’s big banks, which has made me reflect, once again, on their purpose in our society. It also brings to mind the lovely Christmas film It’s a Wonderful Life. Stick with me here.... George Bailey, if you remember, runs Bailey Building and Loan in the small town of Bedford Falls. On Christmas Eve, with the Building and Loan facing bankruptcy due to the dastardly dealings of banker Henry Potter, George despairs. He views his life as a failure, thinking he hasn’t achieved anything of note or made a difference to anyone. Of course, Clarence the angel steps in and helps George see that the opposite is true. That George has been true to his beliefs and principles, has served the ordinary people of his town and truly been the anchor of his community through his business – helping them to buy houses, take out loans, run their businesses. The current debate has resulted in speculation in the press that breaking up the banks may cause them to ‘unload the customers who aren’t profitable’. What exactly does this mean, and how many of us would be affected ? What is the true purpose of a bank ? Is it to make profits to reward high earning executives and shareholders ? Or is it to act as the engine and anchor of the economy and individual communities – made up of ordinary people like those in Bedford Falls. What do you think ?