2023 New Value Report

Accenture on Ethics: Banks Could Boost Earnings by $500 Million a Year

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Accenture recommends a careful framework for an ethical value proposition for bankers. Image: Accenture. 

A new Accenture report examines the ethical gulf between regulatory compliance and corporate policies within financial institutions. This report argues for a framework that encourages people to examine their decisions in the context of ethical and organizational culture. Accenture contends that this will result in increased shareholder value, and more productive teams than penalizing misconduct after the fact.

To get beyond the basics, the report examines the roots of ethical lapses in financial professionals. Accenture’s research found that the image of the self-serving, mustache-twiddling villain banker is almost never realistic. For the most part, ethics in banking suffer when people act on complex opportunities using short-term thinking.

The management consultant giant and Ripple integration partner suggests that what’s needed is a measured approach in adherence to both regulations and rules to take banks beyond compliance and into earnest efforts to shift organizational culture. Accenture presents research showing that unethical decisions are often made to secure quick profits, but bring costly reprimands later. What it offers is an alternative method for individuals to evaluate their decisions, and advice to banks to reduce penalties and focus on preventative training:

“The world’s biggest banks are missing out on a big opportunity. These institutions could boost their earnings by as much as $500 million a year by reducing their misconduct penalties by just 10 percent.” —Lacy, Rodin, and Smith, Accenture

In the past, we’ve seen sweeping regulatory action whenever those consequences are costly on a global scale. However, despite legislative requirements, big mistakes have their roots in the ethical quandaries and minor missteps by individuals. This report emphasizes the need to help individuals exercise good, big picture judgment when stakes are high and deadlines are pressing.

Read the full report here.

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