Banking: 1) trust and credit
So I keep rewatching that clip of “It’s a Wonderful Life.”
http://www.youtube.com/watch?v=MJJN9qwhkkE the bank run…
And I can’t help but think about how intertwined it all is. This notion of trust and banking and how it doesn’t work without trust…
So what is trust?
1 a : assured reliance on the character, ability, strength, or truth of someone or something b : one in which confidence is placed
2 a : dependence on something future or contingent : hope b : reliance on future payment for property (as merchandise) delivered : credit <bought furniture on trust>
3 a : a property interest held by one person for the benefit of another b : a combination of firms or corporations formed by a legal agreement; especially : one that reduces or threatens to reduce competition
4 archaic : trustworthiness
5 a (1) : a charge or duty imposed in faith or confidence or as a condition of some relationship (2) : something committed or entrusted to one to be used or cared for in the interest of another b : responsible charge or office c : care, custody <the child committed to her trust>
— in trust : in the care or possession of a trustee
Wow… look at how much even the definition of trust involves banking concepts. I didn’t expect that… Primarily because our main usage is something a bit more amorphous.
So I turn to wikipedia for something more:
The wikipedia page talks about trust being more emotional and deeper than just reliance… I believe that is crucial to understanding how the public feels in regards to the banks and the banking situation. It is not the mere disappointment of a broken system that they rely on instead it the emotional reaction of broken trust. But why such emotion? I mean it is just a system right?
But if I search again on the term “regaining trust”… the majority of articles are about cheating spouses. I think this is also telling in regards to the level of betrayal people feel in regards to trust.
Banking for most of time has been a very personal relationship. It has only changed in the past 30yrs where people no longer know their banker. I think that emotional connection is very important in regaining trust in banking. I do think it’s going to take some serious work to be regained much like dealing with a spouse that has cheated.
My solution… transparency.
We have to admit what is wrong and put structures in place that illustrate we won’t do it again. I can’t help but refer again to the art of apology from theartofmanliness.com website. We might not be responsible (after all we are creating something new.) But it doesn’t matter. Apologize anyhow and show how it isn’t going to happen again. Show how and why people can trust you again. Show them how you will protect them. So they can believe and have hope. Because in the end… it is emotional.
I think that communicating trust is going to be key for creating a new bank and it’s why I made it my first topic for my series of banking posts.