Banks play a very important role in any economy. They play their roles based on the trust people repose in their ability to get access to their deposited funds when and if necessary. This trust is however flimsy as it is based on perception, which can change like the wind.

Therefore when people make accusations against a banking institution alleging fraud, it kills people’s trust in that bank, which impact will be reflected on its balance sheet.

The local banking sector was recently hit by accusations of fraud and sexual harassment that the banks claim are baseless accusations. Whether they are or not remains to be proven, but we must ensure that accusations can be proven, failing which the bank will suffer from distrust.

To understand their importance to a society, banks take deposits that they then make available to others to be used in business, to pay school fees or rent. The government and private business and individuals usually get loans from banks to fund important projects. Where government is unable to provide funds for development, they mostly rely on banking institutions to provide such loans.

Our banking sector has been under assault by unscrupulous people who are trying to con the banks by making false accusations that border on their integrity in the hope that the banks will meet and settle with such people who would arrange to get the issue dropped. This blackmailing of the sector must be urgently nipped in the bud if we are to enjoy the benefits of a vibrant banking sector to a society.

Banks place a lot of premium on trust, which is perception based. And in their rush to address issues of distrust or mistrust banking institutions make themselves unwitting pawns in the hands of media hustlers who would claim to address such issues on behalf of the bank with the person or institution making the claim.

Trust is hard to reclaim once investors or depositors start withdrawing their money from a bank as a result of a scandal. Hard to build and even harder to regain once lost, trust may just be the most powerful five-letter word in banking today. If we narrow it down, trust falls into two categories: delivering consistently exceptional and personalised customer experiences, and protecting customers and their data from cyber-attacks.

When a bank loses trust due to a scandal building back trust is that bank’s single greatest opportunity to create competitive advantage.

We can see that local banks are addressing issues of fraud and other scandals by leveraging four factors: Humanity, Capability, Transparency, and Reliability. As they try to address the scandals that have befallen them, the banks approach the issue by showing their human side by identifying with the public, which is accomplished by ensuring the public and their customers that they are still very capable of fulfilling their mandate. This transparency slowly rebuilds trust by positing the bank as still reliable despite what has been trending in the public space.

Accusations are easy to make and proving them can take time, which time can affect customers’ or the public’s perception of the bank depending on who does massive media campaigns to allay fears and doubts.

They rebuild trust by reassuring the public of their competence, their customer service orientation and putting a face, or leveraging the bank’s character to address the issue.

The local banking sector must not give into financial or other fraudsters and must do all they can to always keep the public abreast of any and all issues to prevent them being used by their detractors to sully their image and reputation to the public.

Banking and the success of any banking institution is really premised on trust.