Banks True Currency: TRUST

Banks True Currency
Charlie Chaplin is lifted up by Douglas Fairbanks during a rally at Wall Street in 1918.

Banks True Currency

According to U.S. Bankcorp, CEO, and Wall Street Journalist Richard K. Davis, the foundation of banks stems primarily from the value in trust rather than money.

Comprehensive Summary

The article asserts a “symbiotic relationship built on trust” between banks and communities.[i] This assertion presumably recognizes the implied fiduciary relationship—one of trust in confidence—to which banks and communities—its customers—mutually depend for strength.

Richard Davis references “the financial crisis” to instantiate trust as a core value inherently assumed in public perception, and evidently challenged by economic decline. [ii]

From these assumptions, Davis characterizes the intangible value of trust as “banks’ true currency,” because communities ostensibly rely on banks for sustained growth. [iii]

Main Conclusion

Davis further concludes the following:

  • Bank strength, measured in trust, overshadows bank size;
  • Banks represent “the only financial bedrock for vibrancy”; [iv]
  • To suit evolving consumer demands, banks demand “transparency and trust.” [v]

Impact on Quality

This article suggests a significant impact on quality among the following disciplines:

Finance—If banks indeed constitute the “financial bedrock for vibrancy,” then a system predicated on “restoring trust,” may inspire greater public confidence in investment, specifically, facilitating:

  1. Tolerance for Risks;
  2. Technological Competence;
  3. Financial Freedom. [vi]

If achieved, such renewed public confidence in banks may fulfill its purported purpose by incentivizing the financial growth suggested. Therefore, the potential value-added—inspiring balanced trust in banks—delivers quality by instilling tolerance for risks to assure “financial freedom. The assurance of financial freedom delivers quality because perceived financial freedom plausibly encourages greater investment, and if so, sustained financial growth among “entire communities.”

  • Law of Diminishing Returns. However, this conclusion, if taken to its logical extreme, may neglect as an assumption the Law of Diminishing Marginal Returns by W. Edward Deming. [vii] The Law Diminishing Returns assumes a particular threshold of counter-productivity, whereby future yields progressively diminish—marginal returns—to gains smaller than the original investment.
  • Counterproductive Overconfidence—Risk of Diminished Quality. If true, the increased trust Richard Davis recommends here may actually stifle rather than promote continual growth of entire communities. This conclusion Davis even appears to assume in his discussion about the “financial crisis,” allegedly “eroding trust.” [viii]
  • Case in Point: Excess Trust. For example, Davis suggests public sentiment became perhaps too trusting of “the American economy,” putatively presupposing a “strong financial system always creates upward momentum.” [ix] If true, this apparent overconfidence exposes the dangers associated with excess trust. Why? If people trust inordinately in “continual growth” without reasonable reservation, they risk becoming cynical later, assuming a recession. [x] This issue apparently happened here.
  • 2008 Recession. The 2008 recession allegedly characterized a paradigmatic transition in public perception. If true, the downturn perhaps changed perspectives, challenging prior presuppositions, consequently culminating in disillusionment. Hence, inspiring such trust in banks might dissuade market participation during economic decline if not balanced with realistic expectations based on logic, history, and experience.
  • Balance Key. Therefore, overconfidence from greater trust may not necessarily imply continued growth, as the Law of Diminishing Marginal Returns suggests. Instead, restoring such trust risks undermining quality delivery by stifling business consistent with the Law of Diminishing Marginal Returns. Consequently, potential market distrust during a downturn perhaps induced from prior excess trust might undermine quality delivery because:
    • Excess trust adds no value;
    • Excess trust might counterproductively dwarf financial growth.

If anything, re-inspiring such trust may jeopardize quality delivery because it risks inculcating overconfident attitudes which perhaps helped precipitate a recession in the first place. Thus, balanced trust remains key.

MarketingThe article also reveals how trust impacts marketing quality by developing customer value as a primary priority. [xi] Consider the following:

Voice of the Customer—Davis suggests that heightened trust facilitates “voice of the customer” because customers today evidently dictate “what they need” from banks. [xii] They may efficaciously tailor technology to accommodate “evolving definitions” of customer quality, with “transparency and trust.” [xiii]

  • Quality Delivery—By “listening and adjusting,” banks may utilize information to deliver quality because it more readily satisfies customer demand, producing potentially profitable, long-term networks. [xiv] These networks may stimulate financial growth. Therefore, listening to the customer’s “voice” delivers quality by adding value, developing long-term lucrative business relationships with consumers over time.
  • Green Movement­—“Evolving” consumer definitions also empower banks to cultivate trust with customers through other “deeply personal” issues. [xv] These issues potentially imply other “socially responsible” sustainability practices, namely, environmental-friendly alternatives deemed popular in contemporary society. [xvi] The article intimates these environmental-friendly alternatives as a plausible extension of utilizing trust to impact customer quality. If true, such environmentally-friendly alternatives likely delivers quality by satisfying a widespread cultural manifestation—the Green Movement—in contemporary society. Since many people appeal to such environmentally sustainable initiatives, building trust may maximize market segmentation, possibly attracting certain demographics within the environmental community. If true, the added customer value thereby strengths market quality delivery.


The main theme of trust introduced in this article further assumes a legal and/or regulatory quality impact. Trust represents an element inextricably intertwined in fiduciary relationships to ensure ethical financial management between banks and various consumers. Customers entrust banks with a fiduciary responsibility—based on trust in confidence—to safeguard against criminal and tortious violations, e.g., fraud (embezzlement, earnings management, Ponzi schemes), misrepresentation, negligence, strict liability, contract liability, etc. Among their duties include, inter alia, exercising reasonable care in all consumer transactions. If banks maintain the requisite “trust and transparency” consistent with professional ethics, they also inexorably reinforce all other quality standards by mitigating potential liability issues.  Due diligence in confidentiality, information disclosure, and preserving the highest professional standards where possible (circumventing needless company waste) help form a trustworthy financial reputation.

Therefore, the value of credibility—a trustworthy financial reputation that mitigates liability risks—optimizes legal/regulatory quality by reinforcing banks’ promise to provide “entire communities”:

  • Services as intended”;
  • Under reasonable operating conditions.[xvii]

Conclusion—Why This Article?

This article particularly piqued my interest for the following reasons:

  • An opportunity to satisfy my insatiable intellectual inquisitiveness exploring various interdisciplinary issues;
  • Consistent especially with my zealous financial ambitions (aspiring CFA) and former legal background (paralegal, plus two years of law school education);
  • The article’s main theme on “trust” provided a copious cornucopia of impact quality within several industry, incentivizing my abundant analysis.

* * *


[i] Richard K. Davis, “Banks’ True Currency: Trust,” June 2, 2016 12:27 P.M. ET, Wall Street Journal, p. 1.

[ii] Davis at 1,

[iii] Davis at 2.

[iv] Id. at 2.

[v] Id. at 3.

[vi] Id. at 2-3.

[vii] Gettinger, Marilyn, “Iona College—TQM, Foster Part I, Understanding Concepts, Ch. 1, Differing Perspectives on Quality—Functional Finance,” p. 48, 2016.

[viii] Davis at 1.

[ix] Id. at 1.

[x] Id. at 1.

[xi] Gettinger, Marilyn, “Iona College—TQM, Foster Part I, Understanding Concepts, Ch. 1, Differing Perspectives on Quality, p. 35, 43, 47, 2016.

[xii] Davis at 1-2.

[xiii] Davis at 2.

[xiv] Id. at 2.

[xv] Id. at 2.

[xvi] Id. at 2.

[xvii] Id. at 1; Gettinger, Marilyn, “Iona College—TQM, Foster Part I, Understanding Concepts, Ch. 2, Quality Theory—Genichi Taguchi, p. 75, 2016.

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