Blog series – Chris Megone
Do I trust my bank? Well, I have been a customer/client of X Bank for more than forty years. I suppose that reflects a level of trust in an organisation, even though my trust in banks and building societies has not been unaffected by the crisis of 2008/9.
Notice – the question was about my attitude to my bank, but this response mentions my attitude to banks and building societies as a group. Actually there are three questions here: ‘do I trust my bank/building society?’; ‘do I trust the bank/building society sector?’; and, ‘do I trust individual bank employees?’. I shall suggest that these issues are subtly connected.
Let me begin with a story. When I came to Yorkshire in 1983 I joined a cricket club. In that club was a good fast bowler. Bill was a competitive cricketer but a man of good demeanour, reliable, honest, well-grounded, a good judge of people and situations. He was not a saint (can any fast bowler be a saint?), but in human terms a person of virtuous character. And, as it transpired, Bill was the local manager of my bank.
Bill was what I expected of a bank manager – a trustworthy individual. But he also confirmed my view, and expectation, of all bank managers. I did not think it was because he worked for X bank rather than Y bank that he was trustworthy. I expected the class of bank managers (and other bank employees) to be trustworthy. And I expected that he, as a bank manager, would help to spread trustworthy behaviour across the organisation and that the organisation would support him in both remaining trustworthy himself and helping his employees to be trustworthy.
I had these expectations of bank managers in general, even though the banks and building societies which employ them are in competition with one another. In other areas of professional life, accountancy and the law, for example, firms compete for business, but there are certain key features of character which are expected of every member of the profession, and trustworthiness is one of them.
Used to thinking competitively, banks and building societies have responded to the financial crisis to some extent as individual organisations. What is important to them is that their organisation is trusted. Distinct banks and building societies each proudly display their own distinctive values, often seen as part of a competitive brand.
But trustworthiness is something that banks and building societies need to address collectively. As one of our interviewees, a senior member of a very large bank, put it: ‘[it is important to recognise] that a good ethical and cultural baseline is not necessarily a competitive advantage at all. It’s a good thing for the industry to have’.
My own experience also suggests that if customers do have trust it is typically at once more general and more specific than trust in a particular organisation. Customers trust an organisation’s employees, particularly those whom they know personally, or they trust the industry in general. People understand that organisations compete with each other, but they expect the industry as a whole to be trustworthy, and if one organisation, or some individuals, turn out not to be trustworthy, this affects how much they trust the whole industry.
Why is it that PwC can compete with KPMG, Freshfields Bruckhaus Deringer with Linklaters, but it is crucial for every accountant and lawyer, (and every doctor and teacher), to be trustworthy? This is because in all these professional fields there are common fiduciary purposes, with respect to the client’s finances, legal needs, health and education, which make a common baseline of
trustworthiness required. And it seems clear that banking has a common fiduciary purpose with respect to client finances which makes trustworthiness necessary as a common standard here too.
And as the etymology of the word ‘member’ (membrum) makes clear, individual professionals are the limbs of a professional body, or of a firm, and thus their trustworthiness affects, and is affected by, the trustworthiness of the wider body (the other members). Or, as Aristotle put it, we are gregarious beings, so with respect to trust we flourish or fall, as individuals and groups/firms, together.
One way to pursue a collective response is to regulate. But trust depends on the character of individual bankers, and whilst regulation may affect character development it is certainly not sufficient to produce good character. First, those who simply rely on regulation remain at a very early stage of character development, obeying rules without knowing why. And second, character is shaped by more than regulation, notably by the culture of the firm and professional body to which the individual belongs.
Chris Megone, Professor of Inter-Disciplinary Applied Ethics, University of Leeds