Finding the Profit in Fairness

Fairness in financial services is a hotbutton issue the world over. More and more voters, not just in the U.S., are convinced that the financial system benefits its institutions more than the consumers they serve. Even the microfinance industry - long a poster child for benevolent capitalism - has been called into question. As a result, bankers and other finance professionals in the U.S. and Western Europe are bracing themselves for waves of regulation, and the financial institutions of emerging markets like China and Brazil are likely to remain heavily regulated and insulated from competition for the foreseeable future. Underlying the strong appetite for regulation are the assumptions that it’s impossible for a bank to make money by being fair to its consumers and that fairness can be achieved only through legal and policy tools. These assumptions are false. Banking can be both fair and profitable - in fact, fairness can be a source of competitive advantage.