5 Reasons Every Banking Institution Should Have an Ethics Hotline
Those banking institutions that are responsible for financial management, money management, and lending require steep monitoring and regulation for privacy and security. In today’s digital landscape, new risks can present that didn’t use to exist. And while having a robust ethics policy, ethics hotline, and guidelines in place have always been essential; they’re even more important now than ever.
1. Gifts, Fees, and Loans
The SEC outlines the code of ethics for financial institutions to follow with regard to gifts, fees, and loans. Whenever money lending is involved, there exists the potential risk of favors in the form of financial gifts and excess fees in exchange for loan favorability. Having an ethics hotline in place allows the bank to have increased reporting methods in place to cite these instances or situations where gifts may be suspected.
2. Financial Fraud
Financial fraud can happen in today’s digital currency environment with a few simple clicks. And ethics hotlines continue to serve as a layer of protection should anyone, employee or client included, find digital evidence of fraudulent activity. Most of your employees will likely be honest and loyal with your brand, financial transactions, and their careers. But the temptation can be overwhelming, and financial fraud risks exist potential with every transaction.
3. Conflicts of Interest
Moving money and approving loans can sometimes become unethical practices, especially when there is a conflict of interest. Individuals with clout or power may use influence to secure financial deals or enforce transactions. And while banking institution leaders may not always be privy to such violations, the ethics hotline can deputize anyone within the organization and beyond to report suspicious behavior or conflict of interest concerns anonymously.
4. Confidentiality and Data Protection
Along with protecting the finances and insurance of its clients’ funds, a banking institution will also be responsible for protecting confidentiality and customer data. The risk of a company data breach or cyber-attack among the banking industry is much higher than in other, more traditional business industries. And as organizations lay in thorough digital protections, it’s the ethics hotline that can serve as a line of defense in monitoring or reporting digital violations.
5. Sexual Harassment
When employees assemble together under one brand umbrella, whether it’s an in-person co-working environment or remote virtual community, sexual harassment risks exist. Employees who feel threatened will appreciate an ethics hotline, which will allow them to report such unwanted behaviors anonymously and without fear of retaliation.
Banks, credit unions, and lending institutions have to deploy layers of protections against ethics violations, even more so today in the digital money management landscape. Make sure you have an ethics hotline in place as part of your defenses to spot violations early, explore proper investigations internally, and save your institution thousands in potential fines and litigation. Let Ethical Advocate help set up your ethics hotline and monitoring procedures to make sure you’re prepared to tackle any ethics challenge your banking institution might face in today’s new digital dynamic.