Apparently, bankers tend to cheat more than the general public. A recent study performed by Swiss economists on bank employees involved a game where the payoff from answering questions increased if they cheated. When employees were asked questions about their non-work lives, they were mostly truthful; however, when asked about work at the bank, employees cheated 16% more.
In another study, researchers tested 128 bankers at an unnamed firm; each of the employees were asked to flip a coin 10 times. They could win $20 dollars if the flip matched what researchers (heads or tails). Honest people would usually report the matching flip correctly about 50 percent of the time. However, the bankers self-reported the correct flip 58 percent of the time. Researchers replicated the study with more than 350 non-bankers and 80 bankers from a different firm, and results continued the same trend.
Scientists have connected the study to suggest the culture in the banking industry is what compels employees to cheat and that it is okay. Walt Pavlo, who spoke at a Stern BIP session, was in finance at the telecom firm MCI and plead guilty to wire fraud and money laundering in a multi-million dollar scheme. He said that, prior to working at MCI, he worked in the defense industry where ethics were important and cheating was not tolerated. Once he got to MCI, he was “paid for performance” and told to be aggressive.
I definitely see this as a result of the high-stress, highly competitive atmosphere of the banking industry. To me, this study just scientifically proved a theory that I thought was correct the whole time. Bankers are supposed to be competitive, and as a Stern student, I see the competitive spirit in many of my classmates. However, I don’t think changing the culture will be effective, nor do I think it is possible.
-- Jonathan Wang