Despite the ads begging for your trust, banks are not your mom: Don Pittis

Despite tweets to the contrary, banks are no more greedy or evil than other businesses. But maybe we trust them too much.

The current revelations from bank employeesexposedby CBC's Go Public area useful reminder to Canadians that despite all those happyads showing how bankscan make your dreams come true, banksare not primarily interested in your welfare.

Theyare not your mom.

Different standards

One of the reasons Canadians are so horrifiedwhen they hear of employees pressured to upsell, trick and even lie to customersis that, rightly or wrongly, Canadians trust their banksmore than other businesses.

Imagine aGo Public exposof an appliance salesperson persuading you to buymore dishwasherthan you need. Itjust wouldn't have the same impact.

Many of us remember stories about famedCanadian entrepreneur Jim Pattisonfiring the lowest-selling car salesman every month to keep the team motivated. Talk about pressure.

So why should banks be any different?

For one thing, banks have been in the trust business from thebeginning. In the world of banking, trust is everything.

That campaign to keep your trust remains imperative. Trustis a bank's fundamental asset.

Heck, you take your money and just give it to them. Ina country where people don't talk about how much money they earn or how rich they are, the lowliest bank employee knows your deepest financial secrets.

But as it's been revealed this week, trust is just a means to an end.

According tothe rules of business and even according to Canadian law, banks, like other businesses, are compelled to work in the interests of the people who own them.

You are the profit source

A look at the long string of profits from Canada's biggest banksshowstheyhave done aspectacular job for their owners.

You? You are one of the places banks earn those profits.

This does not take away from the fact that Canadian banks are wonderful things.

They are a cornerstone of Canadian wealth and stability. Despite the complaints we have heard from bankemployees, they are huge employers. They are a tool for sharing pools of capital.

From the day your parents took youto open your firstaccount, the banks have been a stable part of a changing world. They nowprove their reliability with ubiquity,the same five or six brand nameson street corners in towns and citiesacross the country.

Shattering that warm feeling

And rather than the traditional silver-haired gentleman at the town fair, the smiling, trustworthy banker now reaches out to shake your hand from the television set. "You're richer than you think" the Scotiabankslogan makes you feel warm inside.

The thought of bank employees being pressured to act like proverbial car salesmen shatters that warm feeling.

Like any business in a relatively free market, banks must limittheir rapacity or their customers will leave in disgust.

But banks also needto worry about protecting thesweet deal that Canadian laws give them. As a group, Canadian banks are protected from foreign competition and sheltered from losses by you, the voter and taxpayer. Appliance salesman don't get those benefits.

Despite the motherhood statements coming out of the banks in the wake of the Go Public stories,you must alwaysremember that if banks were dairy farmers, you would be the cow.

Beware the cuddly ads

In spite of the cuddly ads, the first duty of any bank is to its shareholders. That is not a bad thing. Odds are that you are a shareholder as well as a customer.

Buta lot of Canadians are unsure of themselves when it comes to theirfinances. Ordinary people who don'tfully understand concepts such as compound interest rates, management expense ratios or overdraft insurance should not be forced to bring a lawyer or accountant to every meeting with a bank employee.

Clientsreally do need advice from people they can trust. If banks can't guarantee that trust, maybe regulators must step in. In the meantime maybe customers must look elsewhere for advice they really can trust.

Trust is not earned overnight. It's not just an ad or a PR statement. It is expensive to acquire.

As bank sharesreel in light of the recent revelations, it's a reminderthat squeezing clientsfor short-term profits byexpending a bank'sfund of trust is not just bad for customers. It'sbad for business.

Follow Don on Twitter @don_pittis

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