Despite tweets to the contrary, banks are no more greedy or evil than other businesses. But maybe we trust them too much.
The current revelations from bank employees exposed by CBC's Go Public are a useful reminder to Canadians that despite all those happy ads showing how banks can make your dreams come true, banks are not primarily interested in your welfare.
They are not your mom.
One of the reasons Canadians are so horrified when they hear of employees pressured to upsell, trick and even lie to customers is that, rightly or wrongly, Canadians trust their banks more than other businesses.
Imagine a Go Public exposé of an appliance salesperson persuading you to buy more dishwasher than you need. It just wouldn't have the same impact.
Many of us remember stories about famed Canadian entrepreneur Jim Pattison firing the lowest-selling car salesman every month to keep the team motivated. Talk about pressure.
So why should banks be any different?
For one thing, banks have been in the trust business from the beginning. In the world of banking, trust is everything.
Look around the older part of any Canadian city and you will see big, square solid-looking buildings with ornate scrolling and classical pillars. "Trust us," those buildings say. "With a palace as impressive as this, are we going to go broke and lose your money?"
That campaign to keep your trust remains imperative. Trust is a bank's fundamental asset.
Heck, you take your money and just give it to them. In a country where people don't talk about how much money they earn or how rich they are, the lowliest bank employee knows your deepest financial secrets.
But as it's been revealed this week, trust is just a means to an end.
According to the rules of business and even according to Canadian law, banks, like other businesses, are compelled to work in the interests of the people who own them.
You are the profit source
A look at the long string of profits from Canada's biggest banks shows they have done a spectacular job for their owners.
You? You are one of the places banks earn those profits.
Perhaps you'll consider that analysis horribly cynical. But in the face of a barrage of advertising by Canadian banks trying to convince you their only goal is to make you happy and rich, a large dose of cynicism may be the only way of protecting yourself.
This does not take away from the fact that Canadian banks are wonderful things.
They are a cornerstone of Canadian wealth and stability. Despite the complaints we have heard from bank employees, they are huge employers. They are a tool for sharing pools of capital.
From the day your parents took you to open your first account, the banks have been a stable part of a changing world. They now prove their reliability with ubiquity, the same five or six brand names on street corners in towns and cities across the country.
Shattering that warm feeling
And rather than the traditional silver-haired gentleman at the town fair, the smiling, trustworthy banker now reaches out to shake your hand from the television set. "You're richer than you think" — the Scotiabank slogan makes you feel warm inside.
The thought of bank employees being pressured to act like proverbial car salesmen shatters that warm feeling.
Like any business in a relatively free market, banks must limit their rapacity or their customers will leave in disgust.
But banks also need to worry about protecting the sweet deal that Canadian laws give them. As a group, Canadian banks are protected from foreign competition and sheltered from losses by you, the voter and taxpayer. Appliance salesman don't get those benefits.
Despite the motherhood statements coming out of the banks in the wake of the Go Public stories, you must always remember that if banks were dairy farmers, you would be the cow.
Beware the cuddly ads
In spite of the cuddly ads, the first duty of any bank is to its shareholders. That is not a bad thing. Odds are that you are a shareholder as well as a customer.
But a lot of Canadians are unsure of themselves when it comes to their finances. Ordinary people who don't fully understand concepts such as compound interest rates, management expense ratios or overdraft insurance should not be forced to bring a lawyer or accountant to every meeting with a bank employee.
Clients really do need advice from people they can trust. If banks can't guarantee that trust, maybe regulators must step in. In the meantime maybe customers must look elsewhere for advice they really can trust.
Trust is not earned overnight. It's not just an ad or a PR statement. It is expensive to acquire.
As bank shares reel in light of the recent revelations, it's a reminder that squeezing clients for short-term profits by expending a bank's fund of trust is not just bad for customers. It's bad for business.
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