In the modern banking and finance sector, relationship management is heralded as a key to success. Relationship managers are expected to build deep connections with clients, offer personalized solutions, and ensure long-term loyalty. On the surface, this appears to be a win-win approach. But peel back the layers, and a more controversial truth emerges: relationship management is increasingly becoming a tool of manipulation, sometimes bordering on unethical practices.
At its core, relationship management is supposed to be about trust. Banks and financial institutions claim to offer tailor-made financial solutions based on client needs. However, in many cases, the relationship manager's incentives are not aligned with the client's best interests. Most are given aggressive sales targets—from pushing credit cards and loans to high-commission mutual funds or insurance policies. The result? Managers often prioritize profit over ethics, nudging clients into products that may not suit them just to hit numbers.
This misalignment has led to several scandals in recent years. In India, several banks were caught mis-selling insurance and mutual funds to senior citizens, who barely understood the terms. In the U.S., the Wells Fargo fake accounts scandal revealed how relationship managers, under pressure to meet unrealistic goals, opened millions of unauthorized accounts. While these are extreme examples, they underscore a more widespread issue: the blurring line between relationship building and coercive selling.
The situation is worsened by the lack of financial literacy among clients. Relationship managers often operate in a power dynamic where the client relies heavily on their “expert advice,” not realizing that the advice is often sales-driven. This makes it easy to manipulate outcomes in favor of the bank, rather than the client.
Another layer to this controversy is the preferential treatment wealthy clients receive. High-net-worth individuals (HNIs) often get exclusive access to better products, lower interest rates, and even lenient loan approvals—all thanks to relationship managers who act as gatekeepers. Meanwhile, ordinary customers are stuck navigating automated systems, poor service, and predatory terms. This fosters a system of financial inequality, all under the guise of “personalized service.”
Critics argue that the entire concept of relationship management needs an overhaul. Transparency, ethical sales practices, and client-first incentives must replace current models. Until then, relationship management in banking risks becoming a glorified term for targeted exploitation.
In conclusion, while relationship management has the potential to humanize finance, its current execution in many institutions raises serious ethical concerns. If left unchecked, this practice could erode trust in financial systems altogether. It’s time for a candid conversation about where we draw the line between building relationships and abusing them for profit.
At its core, relationship management is supposed to be about trust. Banks and financial institutions claim to offer tailor-made financial solutions based on client needs. However, in many cases, the relationship manager's incentives are not aligned with the client's best interests. Most are given aggressive sales targets—from pushing credit cards and loans to high-commission mutual funds or insurance policies. The result? Managers often prioritize profit over ethics, nudging clients into products that may not suit them just to hit numbers.
This misalignment has led to several scandals in recent years. In India, several banks were caught mis-selling insurance and mutual funds to senior citizens, who barely understood the terms. In the U.S., the Wells Fargo fake accounts scandal revealed how relationship managers, under pressure to meet unrealistic goals, opened millions of unauthorized accounts. While these are extreme examples, they underscore a more widespread issue: the blurring line between relationship building and coercive selling.
The situation is worsened by the lack of financial literacy among clients. Relationship managers often operate in a power dynamic where the client relies heavily on their “expert advice,” not realizing that the advice is often sales-driven. This makes it easy to manipulate outcomes in favor of the bank, rather than the client.
Another layer to this controversy is the preferential treatment wealthy clients receive. High-net-worth individuals (HNIs) often get exclusive access to better products, lower interest rates, and even lenient loan approvals—all thanks to relationship managers who act as gatekeepers. Meanwhile, ordinary customers are stuck navigating automated systems, poor service, and predatory terms. This fosters a system of financial inequality, all under the guise of “personalized service.”
Critics argue that the entire concept of relationship management needs an overhaul. Transparency, ethical sales practices, and client-first incentives must replace current models. Until then, relationship management in banking risks becoming a glorified term for targeted exploitation.
In conclusion, while relationship management has the potential to humanize finance, its current execution in many institutions raises serious ethical concerns. If left unchecked, this practice could erode trust in financial systems altogether. It’s time for a candid conversation about where we draw the line between building relationships and abusing them for profit.
