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There are scandals everywhere. In the banking industry, however, they seem to occur more frequently. For what reason?
The trial against Pierin Vincenz begins on Tuesday. The former Raiffeisen boss is accused of fraud, embezzlement and forgery of documents, among other things. But the Vincenz case is by no means an exception. Again and again there are scandals in the executive floors of the banks. Why is the financial sector particularly susceptible to such scandals?
The risks come too late
“No risk – no return”, says an old adage. Today, however, it takes more risk to generate the same returns, says Manuel Amman, finance professor at the University of St. Gallen. Especially because of the low interest rates, the pressure has increased. “It has become more difficult to generate a good return with safe investments.”
The risks often come later. Income accrues immediately. You are tempted to take too many risks.
In addition to the increased business pressure, there is also a time difference between risk and return. According to Ammann, this leads to the wrong incentives: “The risks often come later. Income accrues immediately. You’re tempted to take too many risks.”
Which character traits are in demand?
For business psychologist Christian Fichter, the scandals are directly related to money. When it comes to money, managers are asked to have certain personality traits in addition to their willingness to take risks. These traits belong to the dark – or toxic – triad.
According to the business psychologist, bankers who exhibit these personality traits can have negative consequences for the institute: “Someone with these characteristics could be tempted not only to do something good for the bank, but also to enrich themselves.”
However, the expert also emphasizes that the toxic triad does not only bring bad things with it. “People who have these traits are more extroverted, open and willing to take risks. These are character traits that are particularly in demand in the financial environment.”
Concrete measures are required
According to Fichter, the problem is not new. And basically you know what to do. Only: In many cases it has not yet been possible to control these negative properties. What is needed is a “change of mind that is reflected in concrete and resilient measures”.
A change of heart is needed, which is reflected in concrete and resilient measures.
In managers, the negative characteristics must be better controlled. In addition, when recruiting, it is often missed that personality-psychological characteristics are tested in the first place, says Fichter. “This should be improved urgently.”