Ethics in financial institutions - Literature review Example

Releasing such information to third parties exposes the customers to potential threats of information. Financial institutions should not only focus on improving their welfare but also that of the clients. To achieve this, it is vital that customers are involved in major decision making of any financial institution. For instance, before a bank can introduce any products in the market, it will be vital to seek the customers’ indulgence. This owes to the fact that such products are aimed at adding value to customers.

On the other hand, it is the responsibility of the financial institution to protect the plight of the customers. This is in terms of any losses that may occur. For instance, technological advancement in the financial sector has opened an avenue for malpractices and fraudulent activities. Currently, there are many financial institutions, which have been hacked into making it difficult to operate. This has happened while these financial institutions straggle to maintain good relationship with the customers.

There are various forms of unethical practices, which a financial institution can be accused of taking part in. the major ones include corruption, failing to disseminate proper information to customers and extorting customers in terms of prices. Embezzlement of funds is a major issue, which many financial institutions grapple with. This is especially in countries, which lack transparency and accountability within the financial institutions. However, financial institutions should not be entirely responsible for all losses, which the customers incur.

This is mostly focusing on the fact that such customers may, through their ignorance share their confidential information with third parties. This is especially those using ATM cards. Such individuals may share information, which can cause them get into major problems. The following discussion focuses on the literature review on ethics in financial institutions. Literature review According to Goodpaster (84), financial institutions are out to service customers and therefore must abide to the moral ethical principles.

One of the main things that the customers are looking for is a financial institution, which they can trust to give them the services needed. Trust is built on the quality of services offered to customers as well as the communication between the two. The financial institutions should be willing to disclose all the information that the customers need. Customers need all the financial information, which an institution deems important. In addition to that, the financial institutions should inform the customers on any changes, which have taken place.

Keeping constant communication with the customers is one of the main ways through which trust is built between the customers and financial institutions. Secondly, Goodpaster (65), states that there is need to have customer confidentiality. The information of the customer should not be disclosed to third parties. If this happens, the customer may lose their money. For that fact, there is need to ensure that the customer’s money is protected against any loss. The financial institutions however have been witnessing many challenges due to increased fraudulent activities.

Hackers have been able to get access to even the most guarded institutions in the world. Recently, some financial institutions in the United States have been hacked by fraudsters causing havoc within