Taking an Ethical Approach - Organic Veg Boxes or Smartphones

It’s approaching twenty years since the Financial Services Authority thought it would be a good idea if financial services firms treated their customers a bit more fairly than they had done previously.

From Treating Customers Fairly to the Consumer Duty, the regulators have been on a mission to demonstrate they are the champions of ethics across the financial world.

This article doesn’t seek to say whether the initiatives have been a success, but to take a step back to look at the fundamentals- What is ‘ethical’ in finance, and where does the Consumer Duty now fit?

Finance- Built on trust

Before the FCA, before the Bank of England, and before the Roman Empire, there were the ‘haves’ and the ‘have nots’.

There were people with more grain than they could use, or more nails, or more money. This isn’t a history of banking, but when someone has a surplus and someone has a need, trade takes place. If you don’t think you were given enough cattle for your grain, or enough money for your nails, someone is going to be angry.

Lending someone money at a reasonable rate of interest to buy timber and nails to build a house means there are three beneficiaries. The lender increases his capital to get a nicer horse, the woodsman feeds his family, and the borrower gets a roof over his head.

There may not have been a regulator, but there was sometimes an unhappy customer who is likely to own a big stick, or sword, or have friends with both. All in all, it was better for everyone to play nice. Taking peoples houses away from them because they can’t pay a high rate of interest on the wood and nails results in a lot of extra work on one side, and an unhappy customer on the other.

But the world is complicated, and few of the best stories are about people playing fair. Often the guy with the wood and nails has friends too.

There have always been people that want a bit more than the next person. It can be simple greed, or prejudice. Much of history has been based on justifying why it is ‘right’ that you take the grain, land or even human beings from somewhere else, simply because the other group don’t wear tailored trousers on a regular basis.

However, there has also been individuals that hold themselves apart from the land grabs, and recognise that there is a living to be made by setting rules that keep the majority happy and punishing those that stray.

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 Source: Article “Taking an Ethical Approach - Organic Veg Boxes or Smartphones” was written by The ZISHI experts, and published in the Advice Matters Magazine | December 2024 |

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