Surveying the reputation-regulation interfacein the SABI industry: Perspectives of privatebanking customersRead online:Scan this QRcode with yoursmart phone ormobile deviceto read online.

Abstract

Purpose: Bank reputations took a severe knock following the global financial crisis of 2007–2009.To get the global banking industry back on its feet, regulations existing at the time werestrengthened and new ones were introduced. While the industry has come a long way in clawingback its reputation, research on the present state of reputations of some global banks suggests thatthese reputations are still underpinned by national regulators. In the South African context, it isnot clear to what extent bank reputations are underpinned by the reputation of the main bankingregulator: the South African Reserve Bank (SARB). This article looks at perceptions of privatebanking customers to ascertain whether they believe that bank reputations derive from thereputation of the regulator.Design/methodology/approach: A quantitative research methodology was applied. Purposivesampling was used to collect data from 111 banking customers using a Likert scale. Fourhypotheses on reputation-regulation relationships were then tested using the non-parametricWilcoxon Signed Rank test.Findings/results: The results show that regulation plays no role in how private bankingcustomers perceive bank reputations.Practical implications: This study highlights that there is little scope for banks to accrue‘reputational rent’ by free riding on the reputation of the regulator. Banks must therefore takesteps to proactively engage in their own reputation building exercises.Originality/value: This research is the first to look at the reputation–regulation interface inthe local banking industry from private banking customers’ perspective. It highlights thateach bank must work hard to build the reputation it desires