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Business culture and dishonesty in the banking industry


Trust in others’ honesty is a key component of the long-term performance of firms, industries, and even whole countries1,2,3,4. However, in recent years, numerous scandals involving fraud have undermined confidence in the financial industry5,6,7. Contemporary commentators have attributed these scandals to the financial sector’s business culture8,9,10, but no scientific evidence supports this claim. Here we show that employees of a large, international bank behave, on average, honestly in a control condition. However, when their professional identity as bank employees is rendered salient, a significant proportion of them become dishonest. This effect is specific to bank employees because control experiments with employees from other industries and with students show that they do not become more dishonest when their professional identity or bank-related items are rendered salient. Our results thus suggest that the prevailing business culture in the banking industry weakens and undermines the honesty norm, implying that measures to re-establish an honest culture are very important.

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Figure 1: Distribution of earnings in the coin tossing task claimed by the bank employees.
Figure 2: Professional identity, materialism and cheating.
Figure 3: Dishonest behaviour and beliefs about dishonest behaviour of different social groups.

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We thank the participating bank, the alumni network organizations of three education programmes, and the municipal office for enabling the research; G. Akerlof and D. Ariely for critical discussions; C. Efferson, T. Herz and S. Gschwend for reading of the manuscript; and D. Bigliel and M. Brunner for research assistance. Financial support from the European Research Council Grant “Foundations of Economic Preferences” and the Gottlieb Duttweiler Institute is gratefully acknowledged.

Author information

Authors and Affiliations



A.C. and M.A.M. developed the research idea; A.C., E.F. and M.A.M. designed the study; A.C. and M.A.M. conducted the experiments, and analysed data. A.C., E.F. and M.A.M. wrote the manuscript.

Corresponding authors

Correspondence to Alain Cohn, Ernst Fehr or Michel André Maréchal.

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Competing interests

The authors declare no competing financial interests.

Extended data figures and tables

Extended Data Figure 1 The impact of professional identity on bank employees’ intrinsic competitiveness.

Competitiveness is measured by the bank employees’ answers to the question “How important is it to you to be the best at what you do?” on a scale from 1 (not at all important) to 7 (very important). We find no significant difference in competitiveness between the professional identity and the control condition (P = 0.861, two-sided rank-sum test, n = 128). Error bars indicate s.e.m.

Extended Data Figure 2 Bank employees’ beliefs about other bank employees’ percentage of successful coin flips.

Incentivized belief elicitation experiment with bank employees. The professional identity condition had no significant influence on beliefs (P = 0.921, two-sided rank-sum test, n = 142). Error bars indicate s.e.m.

Extended Data Figure 3 Distribution of earnings in the coin tossing task claimed by the non-banking employees.

a, b, Each successful coin toss yielded approximately $20. a, Distribution of earnings in the control condition and binomial distribution (implied by honest reporting). b, Distribution of earnings in the professional identity condition and binomial distribution. The rate of successful coin flips is 55.8% (12% misreporting) in the professional identity condition, and 59.8% (20% misreporting) in the control condition, which is not significantly different (P = 0.128, two-sided rank-sum test, n = 133).

Extended Data Figure 4 Distribution of earnings in the coin tossing task claimed by the students.

a, b, Each successful coin toss yielded approximately $5. a, Distribution of earnings in the control condition and binomial distribution (implied by honest reporting). b, Distribution of earnings in the banking condition and binomial distribution. The rate of successful coin flips is 57.9% (16% misreporting) in the control condition and 56.4% (13% misreporting) in the banking condition, which is not significantly different (P = 0.390, two-sided rank-sum test, n = 222).

Extended Data Figure 5 Gallup survey of honesty standards of people in the banking industry.

Fraction of US citizens thinking that bankers have very low or low honesty or ethical standards from 1977 to 2013. This graph is an interpretation of data compiled by Gallup, Inc. However, Gallup, Inc. had no part in the creation of this graphic interpretation.

Extended Data Table 1 Effect of professional identity on cheating in bank employees
Extended Data Table 2 Effect of professional identity/banking condition on cheating in bank and non-banking employees/students
Extended Data Table 3 Competitiveness, professional identity and cheating in bank employees

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Cohn, A., Fehr, E. & Maréchal, M. Business culture and dishonesty in the banking industry. Nature 516, 86–89 (2014).

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