This can go hand in hand rather than polar opposites. If a bank is concerned about its reputation, then it will try and meet the interests of its customers…has a good reputation means more customers, more money infested/borrowed and flow on benefits to the shareholders…namely potentially higher profits and returns on investment.
The system fails when individual interests (within the bank) override the interests of the community (customer base). When individuals are incentivised through bonus systems (KPIs) to sell products, then the system is destine to be corrupted by individuals. When there is pressure to sell products to meet KPIs for bonuses, individuals within the bank (whether it is an officer level through to the CEO) will make decisions in their interests to gain bonuses rather than what is in the interests of their customers to protect their reputation. Quick gains to achieve bonuses drives culture and decision making potentially to the detriment of the bank customers.
The difficulty with the system at the moment is it is still difficult to change financial institutions as it is time consuming and somewhat complex. The banks know this and hits on reputation will only potentially change the decisions of potential new customers, rather than the existing customer base.
If individuals owned their own unique banking number which was transferable between banks, then it would be easiler to change ones financial provider…as the new unique banking number would be registered with the new financial institution and existing automatic transations would automativally port across as the unique account details for transaction remain the same (just in a dirrents holding bank)…I suppose it would be a bit like a telephone phone number than can be churned to another telecom company…without requring a new number to be created by the new telco and need for one to advise all friends of the new number.
If one held ones own unque banking number, then customers could easily leave a financial institution in droves, placing pressure on the banks to maintain relationships and reputations. It could destabilise the banking system…however, would install proper competition between the banks .