The Wolf of Wall Street: How We Can Combat the Crisis of Trust in Finance?

The story of the rise-and-fall of jailed stockbroker Jordan Belfort has sparked controversy from almost every corner of the globe. With the mainstay of the film being immoral financiers targeting the weak and vulnerable to fund a life of ridiculous debauchery, it's no great surprise.

The story of the rise-and-fall of jailed stockbroker Jordan Belfort has sparked controversy from almost every corner of the globe. With the mainstay of the film being immoral financiers targeting the weak and vulnerable to fund a life of ridiculous debauchery, it's no great surprise.

Among other things, it has prompted a fiery debate about corporate greed and public trust in financial institutions. Belfort's firm, Stratton Oakmont, worked to build up high levels of trust among its clients, only to lie, cheat and force them into buying useless shares. The firm's tagline neatly illustrates just how little it respects its clients: "Don't hang up until the client either buys or dies".

So how far can we expect this impression - however exaggerated - to drive down public perceptions of financial institutions? At a time when the banks are scrambling to get the public back onside, the 'Wolf' clearly hasn't helped. Nor have stories about banks booking out entire cinemas for a premiere viewing, which have led many to claim those in charge are ignoring the crisis of trust - and perhaps even revelling in it.

At CEB we conduct regular studies on consumer confidence about financial institutions, surveying around 18,500 consumers across the globe. Last month our Consumer Financial Monitor found that 54% of those in Europe simply don't believe that banks care about their customers - a tiny 2% increase since this time last year, suggesting that financial institutions face a long struggle to get back in favour. Corporate jargon and a perception that advisers are trying to pull the wool over their eyes is also an issue: 58% say financial providers are incapable of offering clear and simple policies.

This is partly rooted in frustration about the fundamental flaws in the industry associated with the financial crisis, which still persist even years after it began. Yet with most people saying that trust is the most important factor in hiring an investment adviser - sometimes even more than a golden performance record - it's clear that systemic cultural changes are needed.

Yet the surprising factor is this: While Libor scandals, bankers' bonuses, or the excessive greed of Wall Street might be what grabs the headlines, it will always be consumers' perceptions of how they are treated on a daily basis that really makes the difference. Banks who deliver high quality branch interactions, for example, experience over twice the intent to stay and four times the recommendation levels as those who don't.

The key to restoring public confidence isn't trying to counter the rumours about greed and excess, but rather concentrating on giving customers consistent support and building deeper, long-term relationships. This means giving people 'something for nothing', following up on promises and making clear that there are transparent business processes in place. First Direct bank is one good example of this. Its clearly defined customer-centric approach, including a 24-hour helpline and the offer of £100 if you switches to its current account, means it regularly tops the charts as the UK's most trusted financial provider.

Those in the industry need to stop worrying about the headlines and instead focus on the small steps to make a difference to their customer base. Only then will we have any chance of seeing public trust creep back to pre-crisis levels. And you never know: along the way we might convince people there aren't really all that many 'wolves' on Wall Street, in the Square Mile, or anywhere else.

For more information: http://www.executiveboard.com/exbd/financial-services/consumer-financial-monitor/index.page

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