Customers trust a bank that protects their confidentiality.
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HISTORICALLY,
bankers were always highly regarded members of a community, not
necessarily because the institutions they represented had deep pockets
but also because bankers were perceived as having intimate knowledge of
the financial positions of every member of that community.And quite like judges, it is considered highly unethical for bankers to share such knowledge of their clients' financial matters even among themselves. Consequently, and quite like judges, too, bankers are often seen as a group of people who are extremely careful of whom they mingle with.
Such ethics applicable to bankers, in time, were also made applicable to the banking institution. Banks are not supposed to reveal financial details of their clients, unless compelled to do so by legislation, such as in assisting official investigations or by a court order. In many jurisdictions, including in Malaysia, protecting the client's confidentiality falls within an act passed in Parliament.
Consumers prefer it that way. No bank customers would want their financial matters be revealed to all and sundry. In fact, the traditionally tight banking secrecy rules practised by banks in Switzerland made the country one of the preferred choices amongst the wealthy, who almost always prefer to be discreet about their wealth, as to where their money should be kept.
Swiss banks, especially those offering just "numbered accounts" instead of those carrying names of the account holder, will only reveal financial details of their clients when they are required by investigating authorities, and that, too, was a development only after the Sept 11, 2001 incident in the United States.
In recent months, and directly related to the increasingly heated political manoeuvrings leading to the forthcoming 13th general elections, a new trend seems to be developing in Malaysia, where banking details, otherwise considered private and confidential, are being widely circulated for consumption of the general public.
Parti Keadilan Rakyat strategic director Rafizi Ramli, for instance, has been revealing one after another of the financial transactions of the beleaguered National Feedlot Corporation (NFCorp), a company now being investigated for possible irregularities related to a multi-million-ringgit project to produce meat.
Rafizi's motives for doing so are not difficult to ascertain. He is a politician, a member of a party hell-bent on winning the forthcoming general elections.
The NFCorp is operator of a project mooted by the sitting government and Rafizi's party is going all out to paint an ugly picture of the project and its owners. Never mind that there is an ongoing official investigation on NFCorp; as far as Rafizi and the political party he belongs to are concerned, issues affecting the company are seen as powerful political campaign material.
Whether or not Rafizi had gone against any legislation concerning banking secrecy is for the authorities, especially Bank Negara, to determine. But what is certain is that banking institutions must take a good look at this new trend.
Account and transaction details of their clients, no matter how small, must remain private and confidential.
Banks must make it impossible for account records of customers to be taken out of the bank's systems or premises unless with authorisation right from the very top.
Failure to do so would not only deny bank customers the privacy they desire but will ultimately ruin the banking industry's reputation. Potential customers would surely avoid banking with banks that cannot guarantee their privacy.
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