In the past banks practiced better ethical standards in that they gave the customer the upmost respect and treatment. The banks used a utilitarian approach. They weighed out each stakeholder and listed the customer at the top. By making the customer happy, they figured this made the bank successful. It may be disappointing to see banks moving away from this approach but it is not unethical behavior.
Governance is still an important aspect to consider with both approaches. The governance or ‘tone at the top’ of a bank will be the main factor swaying the ethical practice of a bank one way or the other. Top management and the BOD now realize that being a profit driven company is what they need to do. The governance twenty years ago was different comparatively to the now retail driven governance. Seeing the same governance that existed twenty years ago will most likely not be seen again in this lifetime. Banking ethics have become an essential component of good governance (Ira 2009).
If you could ask banking executives 30 years ago to rank the stakeholders of their industry, customers would be number one. Today, the profits of these banking giants would be number one and their actions reflect their priorities. One of the similarities that these two different eras of banking have in common is the importance of customer retention. In