Since the 2008 subprime crisis and the resounding bankruptcy of the American investment bank Lehman Brothers which left a lasting impression, the banking world has been going through a severe crisis. This distrust has not only settled in the relationships between retail customers and banks but also between banking institutions and their own regulatory authorities.
Thus, while European legislators deemed it wise to raise the ceilings from 20,000 to 100,000 € for savings deposit protection to reassure savers, regulatory authorities continuously encourage banking institutions to strengthen their capital and undergo stress tests.
Furthermore, Europe is attempting to achieve a broader banking union that would allow for increased solidarity between banking institutions in case of difficulties.
The survey results
A study conducted between July and October 2013 by the firm Ernst & Young shows that more than one in two customers does not completely trust their main bank, a trend more pronounced in Europe than in the rest of the world.
According to this study conducted in 43 countries, 44% of customers say they have “complete trust” in their main bank, a proportion that falls to 32% for European customers.
In France, 9% of respondents say they have very limited trust in their bank, a proportion that concerns 33% of Irish customers and 17% of Spanish customers.
Thus, while 40% of customers surveyed worldwide would recommend their main bank, this figure drops to 29% in Europe.
Why such discontent?
Numerous recent cases and scandals have tarnished the public’s trust in banks.
We are, of course, thinking of the J. Kerviel case which cost Société Générale nearly 5 billion euros following dubious positions; the B. Madoff case, sentenced to 150 years in prison following a fraud involving nearly 65 billion US dollars; the recent Libor manipulations carried out by major banking institutions both in the City and on Wall Street. Just watch the latest film by M. Scorsese, “The Wolf of Wall Street” featuring, among other stars, Leonardo DiCaprio, to realize how catastrophic the public’s image of the banking world is. The viewer discovers in this feature film brokers who truly have no knowledge (or scruples) of the financial products they offer to their clients.
Without delving into these “extraordinary” cases, the survey reveals that nearly a third of customers reported a problem with their bank in the last 12 months and that among them, 33% were dissatisfied with its resolution. A third of very dissatisfied customers with the resolution said they wanted to close all or part of their accounts.
Specific grievances in private banking
It’s no secret that private bankers, that is, bankers assigned to discretionary management of securities portfolios, receive specific instructions from their employer to sell financial products developed by their banks. They even receive specific commissions (bonuses) if they manage to sell these products to their clients.
Is it necessary to specify whether these products are good or bad (example: a bank offers you a life insurance developed by them). Needless to say, the pressure is strong on the small client to whom the bank offers products on the condition of subscribing to some “in-house” products. The banker will explain that these are excellent products and that the management cost is reduced to 0 because they are precisely “in-house” products.
We have only one piece of advice for you: resist and compare! Only buy financial products that you are intimately convinced correspond to your desires and investor profile. Follow through with your ideas. Also compare with products from other banks.
Your banker doesn’t want to follow your wishes? Change banks. You will see that suddenly, they will see things differently.
How to choose your bank wisely?
Our website is full of smart advice to support all your life projects, and choosing a trustworthy banker is surely part of it. So take the time to read our advice article dedicated to the right choice of a bank.
CPE is not a bank but a credit intermediary
Our company is not a bank but a credit intermediary.
Our corporate purpose is to help you obtain a personal loan or a mortgage from a banking institution.
To do this, we help you prepare your file, which will increase your chances of obtaining the loan you want.
Why not approach the bank directly?
There are several reasons for this:
- Banks delegate their retail activity to credit intermediaries like CPE;
- Banks only manage professional or very large credit requests;
- A credit intermediary ensures the diversity and competition that a bank cannot provide;
- A credit intermediary can get you a decision within 48 hours, which will never happen with your banker.