$10m fugitive reveals bank's reputation deficit
How would you feel if 20% of your customers had so much antipathy toward you and the sector your business operates in that, given the chance, they would abandon their usual honesty and ethics just to get back at you?
Would you feel you, your business, and the rest of the sector had failed miserably to establish and maintain a good name in the marketplace?
Would you feel all the talk about corporate reputation management was just that?
This is the situation in which Westpac and the banking industry finds itself, in the wake of Leo Gao's attempt to skip the country with $10 million wrongly credited to his account.
One-in-five people voting in an online poll said they would keep the cash if Westpac put the money in their account instead crediting it to the now-fugitive former Rotorua service station owner.
Of course, the poll result doesn't mean banks face a 20% chance funds will be misappropriated if they are credited in error. That's only what people said. An individual might not actually do so if the opportunity occurred.
However, the number of people saying they would is indisputably large.
If the banking industry needs a gauge of its reputation, there can be no more compelling measure.
Except perhaps for the number of online comments such as "stuff the banks!" and "I do not have sympathy for the banks, they rip us off anyway" when the NZ Herald put the Lotto-style question to its online readers "what would you do?".
Responses did not discriminate between banks, demonstrating a widespread perception all banks are rip-off merchants - bad news for executives and marketing advisers hoping to establish a point-of-difference for individual brands.
Some of those providing online feedback on the Westpac case saw an opportunity to comment on the ethics of other banks:
"Shame it wasn't the ANZ given their stance on the ING products they promoted as 'low risk' investments to many retirees who are facing a miserable retirement given their money is now essentially gone. ANZ acted like a bunch of low-life drug pushers."
Other responses drew parallels between banks and power companies which overcharged customers:
"The bank gifts a most esteemed customer 10 mil then calls it theft. The power companies rip the public off for 4.3 bil and it's called good fortune."
"Leo has to give back his 10 mil gifted to him but the power companies can keep the rorted 4.3 bil because ripping off the punters is considered perfectly acceptable."
"It is not okay to rip off the banks because they are all about one-way traffic. They can rip you but you're not allowed to return the favour."
You could see the 20% who said they would keep the money as a Herald leader-writer did - as people who had "reached the point where honesty is overpowered by temptation".
You could also see it as a clear demonstration the banking industry is in reputation deficit.
If it was your business, would you be thinking about what you could do to reverse the poor perception of your business and your industry?
And would you be questioning the gap between this damning gauge of reputation and the reassuring measures of brand repute regularly presented in market research?
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Comments
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The letter writer has chosen to ignore the point of my column — that the banking industry has a serious reputation management problem.
John Barley says it is not OK for me to repeat that “One in five people voting in an online poll said they would keep the money . . .”.
Well they did and I am.
The reason was not, as he implies, to endorse dishonesty, but to illustrate the scale of the issue facing the banking sector.
I posed this question:
How would you feel if 20% of your customers had so much antipathy toward you and the sector your business operates in that, given the chance, they would abandon their usual honesty and ethics just to get back at you?
The point of my column was to focus Business to Business readers on the impact business reputation can have on customer relations, behaviour and profitability.
Incidents such as the $10 million Westpac fraud and the subsequent online poll provide a measure of the effectiveness of corporate reputation management.
This has caused Mr Barley to consider the reputation of the industry he works in, insurance, which is similarly the target of fraudulent activity. As with the banking sector, perpetrators rationalise their fraud as somehow balancing what they see as the dishonest practices of insurance companies.
Instead of hand-wringing over declining customer honesty, Mr Barley should perhaps acknowledge that modifying perceptions of an industry can change customers’ behaviour.
Obviously, his first challenge will be shifting perceptions of his own industry.Posted by John Shattock, 08/09/2009 10:43pm (6 months ago)
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(Letter to the Editor, Business to Business)
I am writing in relation to the article presented by John Shattock "fugitive reveals bank's reputation deficit" in Business to Business June 2009.
Firstly, recognizing that this is an article presented by one of your authors /subscibers and you don't necessarily agree with the comments made I am, however, very disappointed and
dismayed that such an article would could be entered for readership. There is such a thing as freedom of the press and people should be allowed to express their thoughts and belief freely.
However, there is such a thing as media responsibility and the time is coming when New Zealand readers need to place a mark in the sand.
I suppose that such articles create a flurry of correspondence and encourage some to respond.
This is all healthy and to a point should be encouraged. I strongly believe, however, that what should be discouraged is the ability of society to endorse through the written word that it is okay to steal money when it clearly does not legally belong to them. If these same people who fall within the 20% who would seriously consider taking the bank's money had their money stolen from them because of an innocent mistake all hell would break loose. It does anyway - which is why Fair Go and Target are so popular. It is why there are statutes in place so that people do get a fair deal and so that their money and interests are protected.
But it seems to me with the article written the perception is it is OK to steal and to accept money on the basis that the banks "rip people off" and they obviously have plenty of cash to
spare. It's NOT okay. It's not okay to even mention it because this sort of article sends a dangerous implied message of approval.
Theft is theft whoever you take it from. It's NOT okay to advertise that "1 in 5 people voting in an online poll said that they would keep the money". This then permits others to think "well, if one in five think it's alright then it must be all right."
It's not all right and just another example of the quickly slipping standards in this country. In
terms of crime New Zealand is always at the end of the global line when it comes to undesirable trends. It is what makes living in New Zealand so attractive. Glorifying any sort of crime simply pushes closer the day when our personal standards of honesty and integrity
match the deplorable state in other parts of the world. Would you return that lost wallet?
Would you cheat in an exam? New Zealand has always been recorded as one of the most honest places in the world and one of the best to do business. We should be proud of this and applaud the standards of the honest 80%.
As an example, I work within the finance sector, in the insurance industry. The insurance industry does not have a good reputation because despite the 95% of positive outcomes you only ever hear about the negative outcomes. You've heard it all before …. the claim that was
not paid after so many years of paying premiums. No body talks about the huge number of ex gratia claims that insurance companies provide and the extra mile they go for many people, the financial assistance that is given to thousands of customers.
One of my clients during the process of negotiating a claim quite calmly during the conversation let it be known that the majority of a poll of people in the Hurstmere Road Shopping Centre considered that it was okay to commit fraud against the insurance companies
on the basis that "claims are never paid". This is insulting to the large number of New Zealanders employed in the insurance industry and who do their utmost to get things right.
They also forget that when premiums are increasing, part of the reason is because of the fraud committed by customers and which ranks in the range of several million dollars per annum.
What they forget is that if no one committed fraud the premiums would be lower. Every time a false claim is made, the cost is spread across the entire customer pool - which all of us pay
including those that steal. … By the way the customer's claim was paid in full but he won't have mentioned that to anyone.
With any business which experiences theft it has to recoup the losses somehow and the cost is added to every product, or in the case of banks is incorporated in the administration charges - for everyone. That means in reality that the person who commits fraud is actually stealing from everyone who purchases from that business, including themselves.
Some companies, especially the larger corporations are now more than ever under the watchful eye of legislative bodies and there is a voice for any dissatisfied customer. However,
these corporations do not have a legitimate voice to talk of all the people that slide through the cracks and steal money from the organisation and thus the shareholders. The reason is
because it is not appropriate to do so. They forget that these are significant employers and also conveniently forget that they probably have friends who work in the industry.
I would also add as one final comment that these corporations contribute to society more money than any of us could possibly imagine. Think of Westpac Helicopter - maybe in future
the pilot should have the injured undertake the same honesty poll as the one mentioned before giving the privilege of life saving transport. "Think that stealing from Westpac is OK? Oops, sorry mate I'll have to leave you behind."
I know this makes me sound ancient but it seems that we have forgotten the lessons that our grandparents taught us. Those people that learned the basics of living within their means, and
despite hardship doing so with courtesy, honesty and integrity. The simple lesson is "you get nothing if you don't work for it" and "you earn your reputation with hard work and honesty".
Every time you point your finger at someone else there is always four pointing back at you.
This is a very powerful perspective and one we should all take into account when we throw stones at one another or organisations. Also think - would you want to do business with someone who thinks it is OK to steal money from the bank or defraud an insurer? What does it say about how they will treat your account?
So it's NOT OK to glorify that theft is OK. Theft is theft no matter who you take the money from.
How about in future the media ignores the undesirables who perpetrate this sort of attitude and send a poor message to our young. The attitude of "but the public has a right to know" is just a way of saying that "sensation sells". New Zealand is the best place to live and it is time we made a decision to focus on the attitudes that make it great. We don't need to let the international decline come to us any faster than it must.Posted by John Barley, 08/09/2009 10:35pm (6 months ago)
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