The keys to fighting fraud?

September 8, 2016
/   Insights

We're constantly being warned that fraud is one of the biggest threats facing the banking industry, but the true scale of this was revealed by a recent survey that suggests it could make up...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

In financial services circles, it’s hard to find a more venerable name than Lloyd’s Banking Group. The institution’s history goes back to the founding of Lloyds Bank in 1765, making it older even than the United States. It’s still massive—the fourth largest company on the London Stock Exchange, besides having a listing on the New York Stock Exchange—and it has significant global influence with operations in the Middle East and Asia as well.

Now imagine this august institution’s activities being slammed as “highly reprehensible, clearly unlawful,” with possible “criminal conduct on the part of the individuals involved.” Sounds like Occupy Wall Street rhetoric with a British accent, but it’s not: That’s coming from Mark Carney, Governor of the Bank of England, as part of a verbal lashing administered in late July. In these hallowed circles, it takes a lot for the head of one big institution to bash another, but it’s definitely happening.

The reason is not a secret. In the latest fallout from the ongoing Libor scandal, Lloyds had to pony up some $380 million while admitting to extensive manipulation of the markets, which in turn affected the Bank of England.

While this has to do mostly with shenanigans across the pond, it fits into the pattern of misbehavior on the part of financial services conglomerates. Remember, it’s been six years since the industry tottered on the brink, with some big names going under and others surviving only with a taxpayer-funded bailout. Back then, it was widely assumed—and generally promised—that there would be systemic changes to prevent this kind of malfeasance.

So what’s happened?

Sadly, the drumbeat of news around breaches at conglomerates shows no signs of even slowing down, let alone ending. To name just a few, there’s Citigroup’s Banamex fiasco in Mexico, manipulations by Barclays employees in New York and JP Morgan shelling out billions to regulators and investors alike. It’s no wonder that a leading light of the industry like the Governor of the Bank of England publicly vents his frustration. And of course, he’s not the first. Nor is he likely to be the last, given the ongoing scandals.

Indeed, when the phrase ‘too big to fail’ first emerged, and ‘too big to jail’ came not long after, they seemed to encapsulate all that is wrong about an otherwise great industry—unparalleled arrogance matched by a lack interest in learning from mistakes. Still, the hope was that it was only a moment in time, an unfortunate episode destined to fade from memory. After all, how often do multibillion-dollar conglomerates need to be bailed out by taxpayers thanks to overreach on the part of highly compensated executives?

To be sure, we’re not there just yet. Indeed, the government is even less inclined now to step forward with bundles of cash. But the repeated ethical violations by corporations that really should know better is a sorry sight anyway. There is also the painful awareness that the people at the top will be just fine, a few Bernie Madoffs notwithstanding—that ‘too big to jail’ cliché is lamentably accurate.

In the recent past, every time a new scandal or giant settlement comes to light, it gives ammunition to the chorus of critics clamoring for harsher punishments. The statement made by the Bank of England governor is having exactly that effect over there, and there’s no shortage of similar calls here.

There’s no question that the vast majority of banking professionals are able to do their jobs, and their part to boost the economy, without breaking the law or going to the government for a bailout. But given their high profile, a few bad apples continue to make that task much more difficult.


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.