The lack of trust and confidence in the financial services sector is a “systemic problem” for industry participants, policymakers and parliamentarians, according to Andy Agathangelou, founding chair of Transparency Task Force, speaking at The Global Custody Forum in London.
However, Agathangelou explained that it’s also a chance for custodians to play a unique role in restoring credibility and confidence.
He said that the trust deficit is being so severe that is it becoming a systemic risk. He also revealed that the UK currently has the lowest savings ratio since records began and part of that is to do with the trust deficit.
During his presentation, Agathangelou showed some of the results from the 2018 Edelman Trust Barometer. The results showed that the financial services sector scored a “very poor” 15 out of 15 in terms of general level of trustworthiness.
Agathangelou also noted that the top five factors decreasing trust in financial services companies on the Edelman Trust Barometer include difficulty addressing the problem, not responsive, unwanted selling, confusing products/services and no product/cost transparency.
He expressed how important it is that the financial services sector has to be trusted to function effectively.
Agathangelou said: “Global custodians have a vital part to play in defending the trustworthiness of the finance sector as a whole. However, if there is no confidence in global custodians to protect they have no value and the financial services sector could be in jeopardy.”
He added: “Global custodians must display the very highest ethical standards, profoundly and positively prudent and become hypervigilant and hypersensitive to any risk of malpractice, misconduct and malfeasance. In addition, they must work collaboratively to take evasive action against significant risks and threats to the brand of global custodians.”
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