Thursday 26, July 2018 by Banker Middle East

Trust in financial services

 

A decade after the 2008 global recession—what measures has the financial services profession taken to elevate trust? Matthew Cowan, Regional Director, Chartered Institute for Securities and Investment (CISI) in the Middle East, writes.

 en years from the global crisis and many people still have apprehensions about trusting the market due to its vulnerability and economic fluctuations. Additionally, the problems of the past have led consumers to expect a lot from the financial services profession, including that systems are managed by people committed to high standards of professionalism, integrity and ethics.

Trust is the foundation of any industry, especially in financial services, as it involves a myriad of complex products and services, and increasingly relies on technology and algorithms, which consumers may find difficult to understand. Being trustworthy is crucial because it establishes confidence, boosts a firm’s reputation in the market and improves the financial sector altogether.

The UAE economy is growing steadily, and the rate of growth is anticipated to increase quickly. The introduction of the European Union-directed regulatory rules and the implementation of technology-based blockchain and cryptocurrencies are developments which can give confidence to the market.

FINTECH PENETRATION
In the digital and innovation-led era, technology plays a pivotal role in gaining and maintaining consumer’s trust through more efficient and streamlined operations as well as an enhanced consumer experience. Fintech, such as blockchain and cryptocurrencies, has the potential to improve current systems, such as making processes more transparent and protecting networks from external corruption. These technologies can prevent cybercrimes and improve anti-money laundering and know-your-customer practises and therefore provide a heightened sense of security to consumers when it comes to their personal savings and investments.

STRICTER REGULATIONS
The GCC is an active player in foreign investments. A strong regulatory framework which ensures transparency attracts investors, which will eventually result in increased foreign capital investment. Considering the UAE’s aim to establish a knowledge-based economy, a global and standardised regulation system will assure high quality service in the financial sector and will also impact other industries.

A stricter set of regulations, which are designed to harmonise financial markets, will also raise standards of professionalism and ethics within financial services. New regulatory policies should make it possible for consumers to identify legitimate (regulated) practitioners working within financial services and give regulators the power to ensure these individuals are held to a high standard of integrity. A step such as this would help to improve consumer trust in the sector. It is therefore important that governments are seen to be supportive of these regulatory policies.

CONTINUOUS LEARNING AND CREDIBLE CERTIFICATIONS
A professional workforce, made up of highly-skilled and knowledgeable individuals, can help increase consumers’ confidence and trust. With an in-depth understanding of financial services internationally, professional bodies whose members work within the securities, investment, wealth and financial planning professions, help to keep the investment environment healthy.

Attending professionalism workshops and online learning enhances a professional’s knowledge and skills as well as industry insights. When consumers know that they are working with certified individuals and firms, they are more confident to invest, opening more investment avenues and opportunities.

In today’s economic climate, it is a priority for financial services professionals to ensure they are worthy of their clients’ trust. Although the effects of the global financial crisis are still being felt by financial markets globally, embracing the readily available methods and solutions to help build trust in the market can bring about wider and faster change. By consistently demonstrating transparency and fairness, the financial services profession is getting there—slowly but surely.