“THAT’S HOW THEY TAUGHT US TO DO IT”: Learned Deviance and Inadequate Deterrents in Retail Banking

Abstract

The recent reports of Wells Fargo and Morgan Stanley being engaged in widespread fraudulent sales practices in the retail banking industry make this field a timely and interesting area of study. The current study expands upon previous research examining retail banking deviance and seeks to further explore potential causes of such conduct. Specifically, the current study seeks to explore whether the underlying deviance is being taught by senior employees and also whether current ethics and compliance policies are adequate deterrents. To achieve this goal, the current study utilizes an approach mirroring a qualitative case study. Results indicate that new employees are being taught these fraudulent practices and that current ethics and compliance practices and policies are largely ineffective in curtailing such conduct. Informed by these findings, policy recommendations are presented.