Toward a Perspective of Stakeholder Culture in the Financial System

Stakeholders in the financial industry—including financial firms, consumers, regulators, and emerging stakeholders like the tech industry and social media—increasingly acknowledge the importance of working together to improve the industry and prevent future crises. Yet their actions do not reflect their pro-stakeholder rhetoric and self-interest remains paramount. 

A study commissioned for the American College Cary M. Maguire Center for Ethics in Financial Services argues that one key reason for stakeholders’ failure to work together may be their problematic beliefs. 

The tables below summarize some of the persistent, negative beliefs that financial system stakeholders hold. Overall, they see one another in competitive, rather than collaborative terms. Consumers and regulators believe that financial firms are motivated by greed and blind to others’ needs, while financial firms and other powerful players see their role in terms of driving growth and generating profit rather than building a system that works for everyone. 

These antagonistic beliefs undermine stakeholder relations. Mutual mistrust and the absence of a sense of shared responsibility mean that stakeholders approach one another with suspicion and try to dominate rather than collaborate. As a result, the financial system remains vulnerable and fails to serve everyone’s interests. 

The current financial system incurs high costs in financial failures and from low trust. Improving the situation will require key stakeholders to rebuild relations and develop a sense of shared destiny. 

Financial firms and professionals can start by: 

• Better understanding the “blind spots” that bias how they perceive their roles and the roles of other actors. 
• Finding overlapping areas of self-interest with other stakeholders to develop a vision of common interest. 
• Creating a roadmap of coordinated action to tackle shared problems across critical areas. 
• Agreeing on more productive behavior patterns, especially toward transparent and timely knowledge and information sharing. 
• Finding new reporting and governance mechanisms to hold each other accountable. 

The study also explores: 

• How financial firms’ competitive orientation may undermine their credibility and informal influence over consumers. 
• Why financial firms prefer to retain power rather than pursuing shared interests, even at the expense of consumer trust and the risk of more regulation. 
• The impact that emerging stakeholders like social media, tech companies, and others may have on traditional financial system dynamics.

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