Survey: Trust Vital in Building Sustainable Financial Services Industry

0

Peter Uzoho
When trust is placed at the core of professionalism, it results to better outcomes to investors, the financial industry, and the society at large, a report has stated.

In addition, the report noted that if players in their respective institutions succeed in building trust with their clients, it can help build a sustainable industry.

This was part of the highlights of a survey entitled: “The Next Generation of Trust: A global survey on the state of the investor trust,” conducted by the CFA Institute and presented in Lagos on Monday, at the Corporate Governance and Financial Reporting Quality Conference

organised by the CFA Society Nigeria in conjunction with the IoD’s Centre for Corporate Governance.
According to the report presented by the President/Chief Executive Officer, CFA Institute, Mr. Paul Smith, the future of the financial industry would be promising if professionals chart a cause that better fulfils the industry’s purpose.

It pointed out that the investment industry was competitive and changing rapidly, saying that investor trust remained a foundational element for success.

The report said: “By knowing investors’ goals and fears, investment professionals can serve them better and provide more customised products and solutions.
“Firms can address the components of trust equation –credibility and professionalism, and they should use technology to enhance trust.

“In turn, these actions will create a more professional industry – one that is worthy of greater trust from current and future investors and that has the capacity to build greater wealth and well-being as a result.”

Smith who later joined at others on panel session on the topic: Why Trust Matters, said: “The baseline is that our financial services industry is sort of in the middle of the pack. I think corporate governance lapses make a huge difference.

“If we’re to change the industry we have to think a lot more about the people that we bring into the industry. We have this huge disconnect between the staff and the business module.”
In his contribution, the Chief Executive Officer, ARM Holdings, Jumoke Ogundare, described investment management business as a long-term

business, advising operators in the industry not to be in a hurry to make money.
“The interest of the client must be at the forefront. Clients give the operators in the industry funds to meet their life goals, and that’s a very significant responsibility that operators have to take home.

“Going forward, operators must not only have the expertise but must also have moral compass to ensure that they take that responsibility seriously.

“The second is how the industry itself has done a disservice to the business, so the industry measures performance based on benchmarking whereas the achievement of the operator ought to be when it achieves the goals of the client.”

Also speaking, the Chief Executive Officer, Citibank Nigeria Limited, Mr. Akin Dawodu, who posited that trust matters a great deal for the growth and sustainability of the financial services industry,

noted that the industry globally, has an image problem.
He, however, blamed operators for being responsible for the industry’s reputational dent, adding that they are also responsible for fixing it.

He said: “I think it’s beyond question that financial services industry has an image problem worldwide, especially the case in Nigeria and it’s something we all are responsible for fixing.

“Trust matters, it does. For example, we had stock market crisis 10 years ago; the industry has never recovered and why, because trust was destroyed in the process leading up to the crash, and the retail investors felt that their money was not safe.”

Also speaking, President, CFA Society Nigeria, Mr. Banji Fehintola said: “The most important thing that drives the financial system is trust.
“The capital market at the end of the day is supposed to bring people who have surplus capital to people who have deficit so that they can build economic growth and development.”