Mauricio says: “While the regulators are moving surely but slowly, in trying to make the systems more responsive to ethical abuses, the issues still continue. Financial scams are a function of the lack of market education, financial literacy awareness and investment education in particular.”
As a result, there is a serious need for greater financial education in the Philippines. A large percentage of Philippines households not only remain unbanked (69% in 2015, down from 79% in 2012, according to the World Bank) but are also uninsured (1% insurance to GDP ratio, compared with 4.8% in Malaysia and 6.1% in Singapore).
In January 2016, the CISI began its Financial Integrity Initiative in the Philippines. As part of the scheme, CISI has delivered several workshops and has contributed to the improvement of financial literacy in partnership with the Chamber of Finance Associations & Professionals, the Finance Educators Association and the Junior Confederation of Finance Associations – Philippines.
India sets the standard
India is the country that bucks the trend. Trust is increasing, while at the same time businesses grapple with corruption.
Ganesh Iyer, CISI’s country head, India says: “Ethics is the most important topic in India for almost every industry, but particularly for financial services, which connects all the people and businesses in an economy.”
This is especially important for India because the combination of having “a developing economy and the largest democracy in the world means ethics plays a pivotal role in building India’s global image against the backdrop of a lot of foreign firms establishing their shop here”, according to Iyer.
Banks in India have been tightly regulated, which was a saving grace for investors during the 2008 financial crisis, which otherwise might have had more of an impact in the country.
Says Iyer: “To a large extent, banks and bankers have been trusted by their customers in India.”
This is backed up by the 2017 Edelman Trust Barometer survey, which notes that despite the veritable crisis in trust the world over, “India is among the countries where trust is still riding high”. In fact, the survey goes on to say: “Bucking every trend, India has seen a seven-point rise in the trust index in the year 2017.”
Nevertheless, Iyer believes that in India, businesses still grapple with instances of corruption (India is ranked 79 out of 176 in the Transparency International Corruption Perceptions Index, with a score of 40 out of 100). Fear of whistleblowing and mis-selling, where the actions of the few spoil the reputation of the entire industry.
Yet there have been some developments, including the government working jointly with regulators on new legislation and self-regulatory initiatives by industries themselves to bring in best behaviour.
Furthermore, Iyer says: “CISI in India is able to deliver integrity workshops that reinforce our commitment to propagate global best practices to professionals and, most importantly, to would-be practitioners (students) to ensure they are able to behave ethically when they encounter tricky dilemmas in the workplace.”