The fallout

Last year’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry shone a spotlight on poor practices in the sector. A period of change has followed the Commission, including personnel, policies, customer remediation; and recently the Australian Banking Association released a new Banking Code of Practice.

As stated in this new code of practice, trust is acknowledged as being critical, and bankers need to earn the trust of customers.

If trust had been placed at the heart of organisational culture, this crisis could have been avoided.

Trust as a tool to take us forward

Existing measures and management tools have some blind spots. While satisfaction, advocacy and related customer measures are important, information gaps remain. I recommend using trust as a management tool. By using it well, many of these blind spots will be uncovered.

Using trust as a management tool is not touchy feely. It provides a very practical and tangible approach.

It is important to ask whether people trust an institution, or its leaders, to act in their best interests. Following this, ask if it is providing products and services that do what is expected, and at a fair price. This is a start only, there are more parts to trust. However, those mentioned here are key.

A wider view

Leaders need to ask their customers, and also widen their view. In cases that have been brought to light, there were instances of many devils hidden in detail, perhaps artfully hidden. These details were hard for some customers to see, but they must have been clear to employees or suppliers, and maybe investors and lenders who are very good at going through documents with fine tooth combs. I recommend using a framework that addresses trust across all stakeholders.

By bringing customers, employees, suppliers, investors and lenders together, the framework is rounded out and with the right balance of perceptions across equity, expenses and revenues. So how would this have prevented the crisis?

Prevention is better than cure

Employees and the culture they embody are key to the trust of customers, suppliers, investors and lenders. If employees had been asked the questions relating to trust, and were free to answer honestly, many problems could have been identified and prevented.

For leaders who wish to earn and maintain trust, I recommend they ask these questions and act on the results. Build a culture across an entire organisation that is centred on trust.

Furthermore, if regulators were to mandate such a framework, and it was managed independently, then there is a great chance that, in future, we could avoid the situation we found ourselves in. Customers would receive the care they deserve, bankers could regain the respect they deserve, suppliers could receive the treatment they deserve, and investors receive fair returns.

Earn trust and sleep better

Leaders who deliver on the brand promise, at a fair price, and take care of people and the planet on the way will go a long way to winning back and keeping trust. And they just might sleep a bit better, knowing that their employees are taking great care of customers and investments.