Banking industry culture fosters dishonesty: study
20 November 2014
International bank employees were more inclined to lie for financial gain if they were thinking about their jobs than if they were thinking about their home life, according to a study published online yesterday in the journal Nature, Los Angeles Times reported.
The conclusions implied that cheating propensity was embedded in the business culture of the banking industry, and not in the type of person who went into banking.
According to Alain Cohn, lead author of the study and University of Chicago behavioral economist, ''these were not generally dishonest people; what the results suggested was that current norms in the banking industry tended to favor dishonesty and that the banks needed to initiate a change in norms.''
Researchers had demonstrated that the written and unwritten rules of ethics tended to vary with people's multiple identities, such as worker, parent, student, consumer, taxpayer.
Cohn and his colleagues from the University of Zurich wanted to see which identity prompted dishonesty work identity or at-home identity. The researchers enlisted 128 employees of an international bank, promising to keep its name secret. The study involved playing a simple coin-flipping game.
While one set of employees were asked questions unrelated to their profession, others were asked questions about their professional background at the bank.
Then they flipped a coin 10 times, without anyone watching, and reported the results. The catch: Each volunteer was told which outcome would pay out a $20 reward on each of the 10 trials. They also were told they would collect only if their overall results were equal to or higher than those of a person from a random pilot study.
They subjects were then asked to flip a coin 10 times in private, and report the results and if they told researchers they guessed correctly on a toss, they collected $20 for each correct guess, The Age said in a report which cited Reuters and Bloomberg.
The people who had answered questions about their personal lives said they won 51.6 per cent of tosses - a result suggesting honest behavior while those asked to talk about their banking jobs, though, told the researchers that they won coin tosses 58.2 per cent of the time, more often than probability predicted, according to the study.
In a further revelation, the results in banking did not carry over to other industries.
Repeating the experiment with 133 employees at other companies, including workers from manufacturing, telecommunications and information technology, the difference between the responses of the corresponding groups was insignificant.