An oasis of trust

Northwestern Financial Review, Aug 1-Aug 14, 2002 by Bengtson, Tom

[straight talk]

There is nothing so valuable as trust. We seek it in our families, our friendships and our business relationships. Although our country is built on a well-developed system of contract law, insurance, and other checks designed to mitigate risk, in the end we still need trust. When we lose trust in someone, it becomes very difficult to do. anything productive together anymore.

Trust is proving to be a scarce commodity. Scandals involving companies such as Enron and WorldCom represent enormous breaches of trust, leaving some employees and shareholders cheated and bewildered. We hear about investment firms operating with significant conflicts of interest, and stories about dishonest politicians have been with us since the birth of democracy.

Despite all the bad news, there is one place where people can continue to put their trust - the community bank. The greatest asset at any bank is not the money in the vault or the data in the computer, but the trust customers place in the institution. Bankers know this and take their fiduciary role seriously, so much so that some even put the word 'trust' in their name.

Surveys generally show bankers garner a high degree of trust compared to other professionals. People trust their banker. It is a reputation community bankers have built over a century of honest business dealings, whether that's lending money for a home mortgage, evaluating a business plan for a loan, or partnering with a farmer on a land deal.

Banking is a predictable business where customers know they will get their money back if they open a savings account and entrepreneurs know they can borrow money for a reasonable business venture. There's not a lot of flash and glitter associated with student loans, checking accounts and safe deposit boxes, but most people like what they know. Surprises, when it comes to one's own money, are generally frowned upon.

While high-flying companies attract a lot of media attention, you won't find a community bank featured on the evening news very often. Most community bankers do the essential work of credit allocation and the safekeeping of funds without a lot of fanfare, which suits most bankers just fine. It isn't the spotlight that makes a community and its bank successful - it's trust built through honest business dealings. That's what it takes to turn a good idea into a business, steady savings into a secure retirement, or other dreams into reality.

In the 21st Century, when trust seems hard to come by, community banking has never been more important.

By Tom Bengtson, Publisher