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The ethics of managing small business customers in times of crisis... what would you do?

Wednesday 3 June, 2020
by The Banking + Finance Oath

At a time when so many small to medium businesses are being pushed to the limit, is it possible to balance compassion with realism?

As a lender in this time of Covid-19, the financial institution you work for is supporting small business customers by providing loan deferrals, and the government is also providing wage subsidies. Through your experience and knowledge, you recognise a number of your small business customers are unlikely to recover, regardless of the immediate support offered, or the optimism they have as restrictions ease. Woman in office

What would you do?

Often the ethical dilemmas The BFSO puts forward for consideration are one-off scenario-based situations, but this is a very real issue affecting many small business owners in this current climate. In considering the issues this seemingly simple dilemma presents, take some time to consider the complexities, the trade-offs and the reality of unintended consequences in this situation, including:

  • What is your duty in this situation? To your organisation? To your customer?
  • Who are you most accountable to?
  • How would you approach such difficult conversations with your struggling small business customers?
  • Once you determine what the right thing to do is, how are you going to act on it?

This article may provide further points for consideration:


There are 3 comments for The ethics of managing small business customers in times of crisis... what would you do?.

Re: The ethics of managing small business customers in times of crisis

Wednesday 3 June, 2020
by Martin
Good topic and one I am not facing the issue of currently. My view is that it would be good for those to have dialogue between the parties involved. There will be a lot of assumptions on both sides and lots of potential solutions. Things to consider would be the length of the business relationship and the future of that small business.

Re: The ethics of managing small business customers in times of crisis

Wednesday 3 June, 2020
by Gail Gadd
1. Approach the clients alerting them to the bank and government assistance available.
2. As an employee, I would have responsibilities to the bank offering the deferrals. However, clients are entitled to receive advice regarding their situation.
3. I would need to ascertain what the banks goals were for offering a deferral to clients.
(i)Is it to get them over a short-term problem? (ii)Do they want me to look at clients who will fail and proactively provide advice to seek assistance from another party (iv)Does the bank want me to weed out possible business failures for them to foreclose on?
3. If a client requested assistance, I would look carefully at the current situation, personally and for their business and discuss several alternatives that that would be appropriate and in their best interest. I would also remind them that, as a bank employee, I may have an unconscious bias and that they should also seek advice from their tax adviser and business adviser who may have an alternate view regarding the benefits and disadvantages of keeping the business open versus liquidation/bankruptcy etc.
4. If they wanted to proceed and receive written advice, I would prepare advice that provided scenarios and possible outcomes. The Advice would carry a warning that as a Bank Employee, my opinion/recommendation may be affected and once again they should consider external advice.

Re: The ethics of managing small business customers in times of crisis

Wednesday 3 June, 2020
by Christine
This is a really difficult situation, particularly if the business was struggling before Covid -19. How do you tell your customer that they can't have a chance at saving their business when the Government is providing stimulus for that very purpose? Should I, as a banker have had this discussion pre the pandemic, when I knew the business was already struggling? Maybe. But I didn't and now it might seem like I'm protecting the bank. Which is not a bad thing either.
I suppose at this stage assistance in having the discussion is something which I think is really important and having all the options available for the customer to choose. Taking away their autonomy seems to lack compassion.

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