The financial industry is changing for the better. Slowly, but surely, it is improving. However, the same cannot be said about business ethics. The finance industry needs to follow some strict business ethics in order to flourish and keep businesses out of debt.
Don’t just go ahead and think that you are not affected by the industry just because you don’t work in it. If you are using the services of the industry, you are a consumer; making you a part of the industry. If you ask anyone, they will tell you that the financial services sector is highly unethical; more so than all the other sectors. However, that is not what Mr. James A. Mitchell seems to think.
As the Center for Ethical Business Culture’s Executive Fellow-Leadership, he states that this sector is significantly misunderstood. He states that misconceptions have risen in the sector for quite a number of reasons.
One of the primary reasons behind this misinterpretation is due to the size of the sector. Insurance companies, various banks, pension funds, money lenders, security firms all encompass this sector. Best of all, this is only a very small fraction of the sector. The size of the sector has aided the media in setting headlines. Many of these headlines are aimed at the ethical problems of the sector.
In fact, this sector alone is worth over $50 trillion and is increasing at a steady rate of 8% a year. Interestingly enough, not even the gross domestic product is that high. With literally billions of transactions taking place annually, micro and macro, there are bound to be a few ethical issues. Even more interesting is the fact that the media never covers the good, always the bad; it’s where the money is.
Business Ethics|Self-interest Consumes Us All
One of the biggest problems that any sector faces is that of self-interest. However, in the financial sector, this self-interest grows and becomes worse. Considering how so much money is involved, people become easily corrupted. Businesses forget long-term sustainability and concentrate more on maximizing their short-term profits.
Business Ethics|It’s all about the Benjamins
Another ethical issue this sector faces is that of insufficient mentoring and making money, as opposed to the consumers, the focus of everything. They both go hand in hand; the reason why many businesses make it big while others don’t. Many businesses offering financial services fail because they try to maximize their profit at the expense of their consumers. When people (and the media) find out, nobody blames the single business but rather the entire sector.
If you are in debt, most businesses will show they care about you but primarily care about their profit. Consolidated Credit provided debt settlement advice
Business Ethics|Who to Blame
Nobody is perfect. If you work very hard for a bonus and do not get it, you will be upset. Akin to a waiter who does not receive tips despite his or her excellent service. When executives do not give employees their just rewards, the employees will start to think only about themselves and not the company. This can lead to a plethora of unethical issues. If the executives had paid the employees their just dues, these unethical issues would not surface.
Business Ethics|Consumers Fault
Many unethical issues are caused by the demands of the consumers. In order to keep the customer, the businesses bend a few rules. Claim falsification is one of the biggest ethical issues that plague the sector. If businesses would simply stick to the rules, despite consumer demands, these would not arise.
The financing industry is not a machine; it is not perfect. This $50 trillion industry has its faults here and there. However, in order to promote the industry, a few ethical issues need to be resolved. Small businesses need to stop making their profits their focus. The aim may be to make profit but it’s unethical when the consumers and the laws are neglected and/or bent. The industry needs to boost its professionalism.