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Trust and Compliance

Trust and Compliance

How does a bank rebuild trust with taxpayers, customers, regulators and investors?

As we slowly emerge from the greatest economic and banking crises encountered in more than three-quarters of a century, it is clear the successful banks in the new environment will be those that could be described as “good banks”.

How does a bank rebuild trust with taxpayers, customers, regulators and investors? We trust people because they are competent, we trust people who are reliable. Most importantly, we trust people we consider to be honest. These all relate to how we deal with people. So our first conclusion might be that we have to deliver a service that is competent, reliable and, above all, transparently honest.

For customers, that means doing what you say you will do, when you say you will do it and being up front about costs and conditions. The same holds for other stakeholders. Regulators are looking for banks to be compliant all of the time, good at managing risk and straightforward in their dealings. How do you balance the need to motivate bankers to be efficient and at the same time encourage them to focus on sustainability, which may mean forsaking long-term profit? Perhaps the answer lies in building reward systems that recognize both the up and down in profit cycles so bankers do not receive all of their bonuses until profits have been sustained over a period.

Mark Kennedy, Partner based in Dublin

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