By JC de Swaan, October 12, 2020
Finance can be a force for good in society but, over the past few decades, structural and behavioral changes have pushed the industry away from its mission of serving clients and supporting the economy in favor of enriching itself. At worst, financial services firms are mired in conflicts of interests, cloaked in opacity and complexity, and skewed by information asymmetry. Many of my students are keen to work in finance but concerned about being corrupted as soon as they walk into their first jobs. What can be done to restore confidence in the industry?
Regulation is a critical piece of the puzzle. But even within the constraints of existing structures, my research indicates that well-intentioned finance professionals can buck the stereotypes and succeed without extracting value from the rest of society. And we can all look to them as role models. In studying dozens of such individuals and firms, I found a few patterns. In simple terms, they serve their customers’ interests faithfully, but not in ways that cause harm to other stakeholders. They treat their colleagues with dignity and promote diversity within their organizations and across the industry. And they use their skill sets and networks to contribute to the world beyond their job.
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