The “social license to operate” is best described as follows: companies only get to do business so long as they retain the trust of their customers, employees and other community stakeholders.

The current debate about de-banking reminds us that financial institutions are among the largest beneficiaries of that social license, especially in Australia where the so-called 4 Pillar banks operate under a protected oligopoly. If you want to be cushioned against external and internal competition, then you need to demonstrate why you deserve to retain that privilege.

Apart from arbitrarily shutting customer accounts, banks are also closing local branches and/or reducing their opening hours. They are scaling back on the services available at some branches, even though their archaic processes still require existing customers to attend in person for things like ID verification and to apply wet signatures on hard copy documents. Seriously, you can’t have it both ways – reducing customer access while at the same time forcing customers to get to a branch to sign papers. (In a recent case, I ended up dealing with three separate branches, as well as an inter-state department, just to process some standard forms.)

The Banking Royal Commission dealt our major financial institutions several reputational blows – but rather than forcing them to improve their ways, foster innovation, increase efficiency, embrace technology and lift the overall customer experience, it seems that the banks have hunkered down in defence. They use the findings of that very same Royal Commission to justify why they now need to employ more and more layers of bureaucracy, form-filling and pen-pushing, in an attempt to cover their backsides and to mitigate against the public backlash.

And it’s not just the banks that are under increased community scrutiny – supermarkets, utilities, professional service firms, property developers, telcos, builders, insurers, landlords and tech companies are all facing various criticisms, for things like price gouging, squeezing suppliers, corruption, monopolistic and anti-competitive behaviours, poor quality products and service, financial irregularities, atrocious consumer data protection, environmental damage, unconscionable contractual terms and unreasonable policies. Unfortunately, our regulators don’t seem capable of holding these parties to account, so it will largely depend on consumers and the community to stand up for their own interests.

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