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The value of the banker-customer relationship: experience of individual voluntary arrangements
journal contributionposted on 2006-04-06, 09:34 authored by Keith Pond
Over the last ten to fifteen years, and in response to the huge growth in demand for unsecured consumer credit, UK banks have reviewed, automated, de-skilled and streamlined traditional credit assessment techniques. In pursuit of margin and market share, today’s due diligence relies increasingly on centralised data and statistical “certainty”. During this same period the nature of the banks’ “safety net”, the sanction of bankruptcy and court action, has changed too. The effect of this is not only to increase the potential for recovery, in respect of bad debts, but also to increase the moral hazard problem. However, increased risk is masked by creditor power in recovery situations. This paper draws on theoretical and empirical research from legal, ethical and economic viewpoints and suggests that a reappraisal of this aspect of the banker-customer relationship is essential to restore trust, prudence and long-term profitability
- Business and Economics
CitationPOND, K., 2000. The value of the banker-customer relationship: experience of individual voluntary arrangements. Journal of Financial Services Marketing, 5(1), pp. 32-39
Publisher© Palgrave Macmillan
NotesThis article has been published in the journal, Journal of Financial Services Marketing [© Palgrave Macmillan]. The definitive version is available at: http://www.palgrave-journals.com/fsm/index.html.