A decade on from the crash, has the financial services sector done enough to restore trust?
Lisa Fernihough, a partner in the KPMG financial services team, says YES.
The sector has made significant progress in improving culture, holding individuals to account and building products that have the end customers’ interest at heart.
Firms know they have to get it right for customers, which means operating fairly and honestly, as that’s what drives results. This has been, and remains, the top priority for boards of UK financial services companies.
Of course, regulation has also played a part. Regulations like the Senior Manager & Certification Regime have driven demonstrable improvements in how banks approach culture and personal accountability, and the Market Abuse Regulation has done a lot to encourage serious investment in detecting market manipulation.
The financial crisis and the various scandals that have emerged since broke public trust, and that takes a long time to fully restore. If you look to the US, it took a whole generation to regain the trust lost after the Great Depression. It’s a long journey, but the sector is well on its way to recovery.
Simon Rogerson, founder and chief executive of Octopus Group, says NO.
It’s no wonder that financial services have finished bottom of Monday’s Edelman survey about trust. We’re talking about a sector blighted by petty bureaucracy, mis-selling, meaningless jargon, and endless complexity.
When it comes to taking care of their customers, most financial services companies talk a good game but don’t follow through. Just last September, the Financial Ombudsman Service announced a record rise in complaints. People feel let down by basic errors and poor returns, and taken advantage of by high charges and shoddy service. Most don’t switch, because there’s no guarantee they’ll get better elsewhere.
People don’t trust the financial services sector because most companies make no attempt to understand us as people. The focus on the bottom line, at the expense of the customer relationship, is all too obvious. So, until the companies looking after our money manage to convince us that they really do have our best interests at heart, trust will always be a scarce commodity.