No matter what – banks are still bastards!

It is not just me complaining about the lack of ethics and morals evidenced by banks in Australia. Australian politicians are now supporting what I have been saying for a long time, and it is unfortunately all too true. Banks, ALL banks, direct their activities at preserving and protecting shareholders, their “market position”, their liquidity and their profitability, with SERVICE and the poor old CUSTOMER way down the list of priorities.

We have had, in the recent past, the terrible social effects of the blatant greed evidenced by Wall Street banks in 2007-2008; we have had the LIBOR scandal in London; we have seen many billions of dollars in penalties paid by banks world wide for aiding and abetting questionable  activities and money transfers - now it is the Australian banks falling foul of the regulators.

So far all four of Australia’s biggest banks, the Commonwealth Bank of Australia (CBA), the Australia and New Zealand Bank (ANZ), National Australia Bank (NAB) and Westpac (and some of the smaller ones) have allegedly been guilty of breaching laws and regulations set by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investment Commission (ASIC). They have been variously accused of defrauding customers through questionable investment advice and dodgy insurance cover, rigging the Inter Bank Rate, lacking moral judgment and generally being unethical in their dealing with their customers money.

I will reiterate what I have said, many times before – without customers (people) there would be no money, no need for banks and therefore by default no need for shareholders.

Pursuing the logic of this it would appear to be a “no brainer” that customers – i.e. people, are the vital part of the banking system, not just in Australia but world wide. It should be a simple case of “look after the customer” first and foremost, legally, ethically and with moral undertaking. Do this and the money will look after itself. And what is of utmost importance, trust in the banking system would be restored and banks would no longer invite opprobrium and be considered “bastards”.

This will require a cultural shift  - their “fiduciary culture” - by all concerned, starting with the boards of directors, chief executive officers and managers. Until these people conduct banking with ethical and moral underpinnings nothing will change.

Unfortunately, for all concerned, until they do change and adopt customer best practice they will continue to be mistrusted.