As the great P J O'Rourke once remarked, “a principle is only a principle when it costs you money”.
In other words, everyone can posture around, claiming to believe in CSR, or ethical sourcing or some other fashionable stuff, but unless they actually put some money forward in furtherance of those ideals, it doesn't mean a thing.
The same applies to brands.
In fact the only really acceptable definition of a brand-owner is someone who, if necessary, would rather lose money than lose their reputation.
Reputation is the bedrock of trust. Without it, most transactions simply cannot take place. (Search Wikipedia for Akerloff and Information Asymmetries for more on this).
Be candid now. How many financial services businesses can you think of which would willingly sacrifice a little of this year's margin (and hence a chunk of their bonus) in order to do the right thing by their customers – at least without being threatened by the tabloids first. Nationwide and the Co-Op, maybe? Otherwise I’m not confident most people could name many more.
I’m not saying other financial institutions wouldn’t do the right thing. It’s just that most people no longer have any faith that they will. Faith in the sector is now eroded to the point of invisibility. Which is rather worrying for the future of the economy, since very few of us will be happy to invest in anything but the most banal financial instruments for decades to come.
Most brands have a spark of idealism somewhere within their DNA. You feel they are motivated to do what they do by something other than naked self interest and greed: perhaps professional pride, social purpose, a belief in serving the community, the intrinsic pleasure of the job.
In finance, unfortunately, customers suspect that professional pride has become largely indistinguishable from personal self-enrichment. You are only as good as the size of your house.
This wasn't always the case. British financial services brands were the product of mutual societies, the Gentlemanly Ideal and the Presbyterian and Quaker religions. In other words they existed in pursuit of aims alongside immediate self-enrichment. They had what you might call a superior motive.
Today I think many people would entrust their money to almost anyone before giving it to a bank. Their failure to conceal their greed means that, however clever they may be, many would rather give their money to someone who knew less about finance and more about ethics. Also, many people - bizarre as it may seem - would prefer to get a return of 6% on their money from which their bank makes a profit of 12% than, say, get 7% on which their bank makes a profit of 50%. Repeated experiments show that people are prepared to pay a price for what they see as justice.
If this is the case, and that a financial brand’s reputation for straight dealing is more important than its perceived expertise in finance, it seems to me there is a spectacular opportunity for a few new brands to get in on the act. After all a lack of experience in financial services may now be perceived as a competitive advantage.
Who should do it? The Church of England? A few leading charities? The Hare Krishna? Innocent? Your local pub?
In fact Peter Mandelson's suggestion - The Post Office - isn't a bad idea
PS My own favoured bank at the moment is Kiva.org. I get a 0% return, but I trust them completely.
www.kiva.org/team/Ogilvy if you're interested.
