The Principles of Banking, 2nd Edition

CHAPTER 2Ethics, Conduct and Customer Service

Abstract

Banks are a key part of the national and global economy and their impact is felt across society. For this reason it is an imperative that they conduct their business along sound professional lines and displaying the highest ethical standards. To do this requires that banks consider all their stakeholders in the ordinary course of their business. A bank's customers are no less important a stakeholder than the bank's shareholders and regulators in this regard. This chapter describes a good-practice approach to adopt to ensure high ethical standards are displayed by the bank in all its dealings, and the importance of professional ethics embedded in the bank's culture in ensuring good conduct, good customer service and minimal reputational risk.

This chapter is mainly about doing the right thing. The right thing for the bank, and the right thing for the bank's customers. Originally the author wanted to call the chapter, “Do Good Work” or “Doing the Right Thing”, but settled for the more orthodox sounding title we have here because the snazzier title might have come across as presumptuous. It's a very important topic, possibly the most important one of the “principles” of banking. So why wasn't it covered at all in the first edition? Mainly because in his naivety the author had assumed that one could take this whole topic for granted, that everyone in a bank would always act in the best interests of all the bank's stakeholders, ...