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Back to the future

16 Nov 2010

The importance of trust

Trust is an important consideration in so many things.  Human relationships, business relationships, Government to citizen, citizen to institutions.  So – what happens when the trust is gone?

Trust in financeTrust takes time to build but can be lost in a moment.  The economic crisis of the last couple of years has changed the nature of many relationships, no doubt some of them personal ones as well.  The relationship between the citizen and financial institutions will never be quite the same.  Trusting in the wheels of finance has been damaged beyond repair.  So the financial world is now reliant on the fact that you can choose alternative arrangements within the system but you can’t choose another system.  Or can you?

This seems to be a golden opportunity for some innovative thinking in the world of finance.  Just as the creation of internet banking changed the nature of relationships – mostly an improvement – there now seems to be a similar window of opportunity, albeit negatively driven at the outset.

And, speaking of golden opportunity, the smarter investor is perhaps the one who turned his or her back on the market and bought into something very tangible – gold.  Looking back to old and reliable ways of maintaining wealth for the future.  Gold prices have risen dramatically as investors have looked for something that they can rely on and even hold in their hand.  This need for security is nothing new but it may have some interesting implications…where else might investors look for alternatives?  Will more people realise that the banks are not entirely essential?  Is there a better way out there lurking in someone’s head?

I wonder if the banks had thought to scenario plan?  Do they have a thought through strategy for dealing with a breakdown of trust.  Somehow, I doubt it.  I wonder if they are sitting in their boardrooms wondering what next?

Thinking about the future and developing scenario plans for possible future worlds can give organisations an amazing competitive edge.  The mere fact that possibilities have been considered can make dealing with them in actuality considerably less daunting.  Having clear strategies for future possibilities may cost a little in time and effort but can pay dividends in speed of response.

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