Banks get an F grade when it comes to public trust

If banks were hoping for a little credit for their slight improvement in regaining the public’s trust after close to two decades of mismanagement and scandal, they were rapidly disabused yesterday.

The Irish Banking Culture Board (IBCB) on Monday published its second annual Éist Public Trust in Banking survey. It examines four different areas: ability; integrity; dependability; and purpose. Out of these, the report extrapolates a “trust benchmark”.

This year that figure is -25, and yes, the minus is not a good signal. The figure is a marginal improvement on the -28 of last year but compares very poorly to the +16 figure that applied last year for banks globally.

“It’s hardly surprising that sentiment towards the banks is so negative among farmers”

The IBCB report treads a fine line between accepting there is much more to do and trying to suggest the plight of the banks is interwoven with the general economic malaise. But there’s no getting away from the headline: the Irish public does not trust banks.

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And, in particular, Ireland’s farming community doesn’t. There were just 98 farmers surveyed among the 1,002 people altogether but they were almost universal in their condemnation. Just 3 per cent said the banks adopt a customer-focused approach and almost seven in 10 said things have worsened since the 2008 crash.

“It’s hardly surprising that sentiment towards the banks is so negative among farmers, when you consider the Ulster Bank exit and the level of branch closures/withdrawal of services throughout rural Ireland,” said Rose Mary McDonagh, the Irish Farmers’ Association farm business national chairwoman. “You’d hardly know anyone now in the bank. Bank officials don’t know farmers or understand their business either.”

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Worse still, the surveying was done in March and April. That was before the Central bank slapped AIB group with a record fine over its treatment of customers during the tracker mortgage scandal. Bank of Ireland has yet to hear its fate and few expect it to be any better.

The interviews also took place before the surge of customers at Ulster Bank and KBC were nudged into moving their accounts to new banks. The customer focus of the banks in that exercise, despite plenty of notice and awareness of how challenging it would be, was so poor that they have been hauled in by the regulator, the Central Bank, and told to get their act together.

The 2022 public trust report has not been pleasant reading for banks. There is still little sign that they truly understand what customers expect from their banks. Much work needs to be done if the 2023 report is not to be even worse.