If the banks really want to build their trust back in the eyes of public, then it is essential for them to focus on their economic and social functions more consistently. It is high time that these financial institutions should return to their basic business models rather using their old complex products of no use to humanity.
In this financial crisis banks should innovate new things rather than hibernating the old ones. Transparency has become a new black in the banking industry. Steps are now taken to simplify the banking fee structures. ANZ has introduced a new branding strategy. We just need to wait and watch how promising this new strategy is. They have removed 27 fees on the personal accounts which is a very bold step taken by ANZ.
The bank has laid down its clarity commitment and that is a one page summary of the key loan terms. The best part of these terms is that it will allow the borrowers to review their loan details in simple language and will also give broader information on the entire range of credit products.
But the banks in US have to face an uphill battle in order to restore their credibility because no one have an idea how the bailout money is being spent. The US government in probe of this answered executive salaries and bonuses.
The ‘retain banking review’ has investigated that the remuneration of CEO of America’s leading retail bank has the trend towards more long term performance incentives. This proves that the leading bankers are paid very well with CEO leading the pack. The productivity commission report of the remuneration of bank employees will be released in the earlier 2010.
On the other hand Australian Banker’s Association argues that there is no evidence left in the country which can contribute to excessive risk taking performances. In the Global environment today where one out of every three people trust these banks transparency of bonus and remunerations are very important and necessary if the industry wants its image to be successfully improved.
Car makers, BMW, decided to bridge the gap between widening remuneration of that of top employees and that of line workers. It was a very broad step taken by the CEO of BMW. If the banks really want to demonstrate a sustainable approach it is important for them to bridge the gap between branch managers and a humble teller.
Some of the largest American Credit Union’s are merging now and then and as a result of this the mutual industry is preparing the collaborative banking campaign to take on the smaller financial institutions. As soon as competition will return the increasingly networked economy will drive a new movement of change.
There will be a time when customers will build their own financial future based on the people they are networked with. Americans may choose a devil they know now but if they are provided with some serious alternatives the conditions are right for a change. It is also believed that the institutions now hibernating will be the first to feel the cold.
So what do you think? Should salaries be restructured or should be frozen completely? Should there be banking benchmarks on the salaries? Will the change in salaries help in building the trust back in the eyes of the common man?