# The Emperor’s New Idea Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-07-21 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: The Oldest Banks in the World: Lessons in Banking Strategy Meta Description: Discover the history of the Ufficio di San Giorgio, the oldest chartered bank founded in 1407, and explore the evolution of banking through the centuries. URL: https://financedigest.com/the-emperors-new-ideahtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/jim-prior-ceo-the-partner-1736843667282-compressed.jpg) **Jim Prior,** CEO **,** **The Partners** ![Jim Prior, CEO, The Partners](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/jim-prior-ceo-the-partner-1736843667282-compressed.jpg) Jim Prior, CEO, The Partners The Ufficio di San Giorgio, founded in the Republic of Genoa in 1407, is believed to be the oldest chartered bank in the world. It was instrumental in the growth and power of the Genoese Republic, acting as governor of many of its overseas empires and serving customers as prominent as Christopher Columbus and King Charles V. For four centuries it remained a renowned institution [across the whole of Europe](https://www.financedigest.com/white-bullets-piracy-demonetising-programmes-drastically-reduce-ad-revenues-to-piracy-websites-across-europe-analysis-finds.html "White Bullet’s piracy demonetising programmes drastically reduce ad revenues to piracy websites across Europe, analysis finds"), until Napoleon’s conquest of Italy eventually led to its closure in 1805. The Banca [Monte di Paschi](https://www.financedigest.com/monte-dei-paschis-cash-call-93-covered-so-far-despite-low-shareholder-take-up.html "Monte dei Paschi’s cash call 93% covered so far despite low shareholder take-up") di Siena, founded in 1472, continues its operations today as one of Italy’s largest retail banks, and Berenberg Bank, founded in 1590, is still owned by descendants of its founders. In the light of such successes, one can’t help but suppose that the many [generations of people running these banks](https://www.financedigest.com/how-can-banks-defend-the-latest-generation-of-scam-victims.html "How can banks defend the latest generation of scam victims?") were sophisticated strategists with a well-developed understanding of their customers’ motivations to do business with them. So, hundreds of years on, I find it surprising – shocking even – that the quality of understanding of [banking’s issues and opportunities in today’s world](https://www.financedigest.com/world-bank-cuts-2024-global-growth-forecast-as-rate-hikes-bite-but-lifts-2023-outlook.html "World Bank cuts 2024 global growth forecast as rate hikes bite but lifts 2023 outlook") contains a level of naivety that defies the intelligence that the industry is supposed to have. My specific gripe is with the repetitive proselytising of the concept of trust. In a recent speech at the Federal Reserve Bank of San Francisco, Andy Haldane, the Bank of England’s [chief economist](https://www.financedigest.com/ecb-should-raise-rates-at-steady-pace-chief-economist-says.html "ECB should raise rates at steady pace, chief economist says") said: “Trust is the lifeblood of all things monetary and financial… Building trust…is among the most pressing issues facing central banks today.” He’s not alone. Wherever one [turns in banking](https://www.financedigest.com/central-banks-start-turning-off-the-cash-taps.html "Central banks start turning off the cash taps") the conversation is similar. Here’s a quote from the [chief](https://www.financedigest.com/boohoo-says-exposure-to-sterling-plunge-is-limited-finance-chief.html "Boohoo says exposure to sterling plunge is limited – finance chief") marketing officer of a contemporary financial services company, commenting on an extensive (no doubt costly) programme of research and brand positioning they undertook: “One of our key findings was that trust was key to the relationship with our customers. We have been looking at all the areas where we need to be seen as reliable, which is a [key driver](https://www.financedigest.com/increasing-demand-for-high-speed-motors-key-driver-of-switched-reluctance-motor-market-finds-tmr.html "Increasing Demand for High-Speed Motors: Key Driver of Switched Reluctance Motor Market, Finds TMR") of trust in our industry. It’s basically about keeping our promises.” My point here is not that the observation is wrong. Sure, trust is important, but it’s hardly an original insight, is it? Trust, and therein the keeping of promises, is the foundational principle of money itself – “I promise to pay the bearer on demand the sum of twenty pounds” it [says on the British](https://www.financedigest.com/ryanair-says-british-airports-to-struggle-this-christmas.html "Ryanair says British airports to struggle this Christmas") notes in my wallet; “In God We Trust” on a US dollar – not a 21st Century phenomenon hitherto unseen. Throughout the years of financial transacting it is a basic and obvious truth. That this company described it as a “finding” makes me wonder where they’ve been looking all these years. So, I really don’t see how or who this hand-wringing notion of trust helps. It’s not a strategy or a solution, it’s table-stakes for staying in business. It certainly isn’t differentiating – every financial services business in the world is pursuing this same goal. It’s not a ‘big idea’ that will spawn [innovations in products](https://www.financedigest.com/product-innovations-and-advancements-in-technology-to-boost-automotive-ignition-system-market-growth.html "Product Innovations and Advancements in Technology to Boost Automotive Ignition System Market Growth"), services and customer experience, and it’s not a rallying cry for staff or customers to get behind – no-one gets excited for very long by the Emperor’s new clothes. Oh, and from the public’s point of view they aren’t listening anyway; they want to see it earned in action, not hear it claimed in advance. So it’s a [waste of time](https://www.financedigest.com/just-in-time-jit-and-lean-accounting-streamlining-operations-and-reducing-waste.html "Just-in-time (JIT) and lean accounting: streamlining operations and reducing waste"). And that’s an opportunity missed in an industry that is desperately in need of direction and in which individual companies in fact have a [huge](https://www.financedigest.com/quad-flat-no-lead-packaging-market-huge-growth-opportunity-between-2017-2027.html "Quad-Flat-No-Lead Packaging Market Huge Growth Opportunity between 2017-2027") opportunity to gain advantage through bolder, more meaningful approaches. Financial services organisations, of any nature, looking to break from the problems of their [industry’s recent](https://www.financedigest.com/homewares-market-recent-industry-developments-and-growth-strategies-adopted-by-players.html "Homewares Market: Recent Industry Developments and Growth Strategies Adopted by Players") past and drive advantage for themselves in the future, need to be braver and more meaningful in the ideas they choose to position themselves around. They should look for specific and distinctive aspects of their [relationships with customers and build](https://www.financedigest.com/building-stronger-relationships-with-insurance-companies.html "Building Stronger Relationships With Insurance Companies") innovation throughout their business. They should stop talking about trust and start earning it instead. They should at least try to come up with something that a medieval brand manager would not already have known. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---