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The Banks Need To Take A Brave Pill

The dismal reputation of banks across the world has been further dented by the resignation letter of Greig Smith who accused his former colleagues at Goldman Sachs of "ripping off" their clients and calling their customers "muppets".

Smith's letter merely confirmed what many people believe - we have all been taken for a ride by the banks.

Reuters contacted me when Smith's letter was published to ask if it would further damage the tattered reputation of the banks and what could Goldman Sachs and others could do to redeem themselves.

Restoring a brand's reputation is a complex issue but the simple blue print the banks need to follow can be summed up in four easy to follow steps.

  1. They need to accept they have been holed below the waterline and are determined to restore their reputation. That will mean taking a brave pill as no bank has taken the next step.
  2. They need to apologise - not once but many times until shareholders, customers and the general public actually believe they accept the error of their ways.
  3. They must change the culture within. That means that bankers, from the chairman down, accept that the underhand practises of the past must be binned and a new code of conduct must be signed up to. Any employee not willing to put their name to the charter of good conduct should be kicked out.
  4. They then need to live by the new rules and promote the fact that they have changed to the outside world.

It's not a quick fix and it's probably why no bank that I know of has gone down the route of admitting "we lost our way."

None-the-less, the first major bank that decides to revert to traditional banking values will be on to a winner.

Clients will be queuing up at the front door because all we want is to be treated fairly and respectfully.