A Question of Ethics: Navigating Ethical Failure in the Banking and Financial Services Industry

Abstract

Since the global financial crisis (GFC), financial institutions and practitioners in Australia, New Zealand and Asia have come under scrutiny for a range of ethical transgressions leading to industry scandal, as have their more well-known counterparts in the United States and United Kingdom. Some scandals were caused by people who – driven by greed and the demands of a complex, fast-paced industry – chose to behave unethically. However, evidence from social psychology points to an alternative explanation: a good deal of unethical behaviour is also unconscious. In A Question of Ethics, we draw on themes and findings from various industry scandals to examine contributing factors at the structural, social and individual levels that influence ethical conduct, and how these may be distorted by what social psychologists refer to as cognitive biases. We present data from a six-country survey of banking and financial services industry practitioners, which explores attitudes towards questionable practices and seeks views about the potential for ethical improvement.