The financial sector has witnessed several scams over a long period. Financial personnel deceiving the investment community, businesses and their colleagues have hit the headlines. The root cause for all the scandals is greed. At the same, unethical practices could also be due to no awareness on the simple ideologies of financial norms.
Through having an insight into different scenarios that arise across a financial personnel’s working life and the process of managing the contingencies, one can endeavour to achieve the standards.
There exists a general perception that the financial services industry is more corrupt than other industries. The sector covers a wide array of domains – banks, securities organizations, insurance firms among others.
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For financial personnel managing stocks, they often have to deal with sensitive information that could have an effect on the price of a stock. For instance, if the management of the firm were to disclose that the revenue for the upcoming quarter would be lower than forecasted, it would be considered as sensitive information. The financial professional with access to such information could sell the stocks in the company to evade an investment loss. This would be considered as insider trading and the repercussions could be serious.
Some of The Critical Social and Ethical Trials That the Financial Service Sector Has to Face:
Self-centeredness Changes into Greed
If self-centeredness is not controlled, it could result in decision making at the expense of another individual. The concerned individual accumulates more than required and profit maximization in the short term becomes the objective.
Lack of Moral Development
The lack of effective upbringing could result in ethics being compromised. Business graduates are taught to look at everything from an economic perspective- maximizing shareholder value. If the paramount reason is not questioned, then it is difficult to follow ethical principles.
Associate Ethical Conduct with Legal Conduct
A professionals deed may not be illegal, but possibly, it could still be not considered as moral. For e.g., if an individual is pursuing actions which do not have a legal business function to ensure you do not pay the tax, the spirit of the law is dishonoured.
Professional Responsibility Could Struggle with Organizations Requirements
An ineffective rewards system could trigger unethical behavior. It is critical that organizations are careful about the actions being rewarded.
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