March 09, 2016

Michael Cole-Fontayn: On the importance of restoring trust in financial services

Michael Cole Fontayn

Michael Cole-Fontayn, EMEA Chairman, BNY Mellon


Most mornings when I walk by or visit the Bank of England on my way to the office, I see in its stone facade the security which has defined banking. For most of modern history, banks were fixtures of our city centres and our High Streets, valued as the strongest, most rock-solid buildings in our communities.

Trust and responsibility were at the very heart of banking. Many financial transactions were dependent upon trust and banks could only grow if their customers were confident in and recommended their services to others.

Today is no different. Banks still must deliver a social good, offering services and products that serve the needs of our clients. Our economy is dependent on a resilient banking industry and capital markets that positively contribute to society.

We all know that some sections of the financial services industry broke trust with society, and public opinion polls consistently indicate the UK public believes banks aren’t becoming more ethical or considering their contribution to wider society.

The Financial Times’ Banking Standards Conference yesterday should progress an important conversation around how to reverse these perceptions. I want to offer to that discussion the idea there is a distinction between being trustworthy and trusted. In addition to changing behaviours, the industry has to proactively demonstrate our honesty, reliability and competence on a constant and collective basis.

While the industry has taken many steps in this regard since the financial crisis, we have to do more to translate our efforts into a positive change in the public’s perception of our industry.

At BNY Mellon, we have taken the lessons of the crisis extremely seriously. We have created culture hubs across the EMEA region and bolstered our internal attitudes towards individual accountability.

One of the key aspects of this cultural change is the Senior Managers Regime. While I, and all of our senior leaders, have always felt personally responsible for the decisions that we make and the way we treat our clients, the regime formalises this approach and acts as a helpful reminder about individual accountability, providing clarity across the organisation.

With the rise of fintech potentially reshaping our industry, and the way people interact with their financial providers becoming increasing digital, there is a risk that trust will decline even further.

That’s why it is essential that we demonstrate our culture change now, while protecting and safeguarding our clients’ assets.

I’m reminded that philosophers have long debated “if a tree falls in a forest and no one is there to hear it, does it still make a sound?” This conundrum is truer than ever for financial services – we must make the public and our clients hear and see the changes transforming our businesses to truly regain their trust.