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Bankers Confidence: Introducing a New Approach to Banking

Posted: 29th June 2018 by
Kristinn Gils Sigtryggsson
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Finance Monthly speaks to Kristinn Gils Sigtryggsson, the Founder of Bankers Confidence ehf, an Icelandic company that offers small and medium-sized banks a comprehensive backup and added value support services to enhance their reputation and confidence.


Tell us about the inspiration behind Bankers Confidence – is it what you hoped it would be?

On 8 October 2008, my family was due to fly back from a holiday in Crete. On the way to the airport, we were told that there’s the possibility of our aircraft not landing, as the Icelandic banking system had collapsed and there could be problems connected to paying for the flight. Eventually, the plane landed and brought us back home, but soon after this and after I had fully understood what really happened, I kept asking myself what could be done to prevent this from happening again? What could be done to build trust and confidence in the global banking system again?

Bankers Confidence is now in the process of building its recourses team and funding to target full-service operations within the next 12 to 18 months.


What would you say was the primary cause behind the 2008 collapse in the Icelandic banking system crisis? Is there anything, in your opinion, that could have been done differently to prevent it?

The primary cause can be traced to the collapse of the ‘too big to fail banks’ in the United States.  Some had to file for Chapter 11 but others were kept alive by pumping a lot of public money into them. This immediately hit all Icelandic banks

Yes, something could have been done to avoid this. The construction of the Icelandic banks balance sheets was wrong in a number of major aspects. They had been lending out long-term mortgage loans to support massive investments in the country and they had been financing this by short-term loans from foreign banks. When Lehman Brothers went bankrupt, not only did the American banking system freeze, but all confidence and trust within the Global banking system was lost. Suddenly, no short-term funding was available anywhere.

Even though it can be argued that the beginning of the Icelandic banks crisis was imported, in my opinion, this would have happened sooner or later anyway - all of our banks had been too greedy, trying to grow too fast and consequently, they had been taking unacceptable risks, involving themselves in business deals that carried tremendous risk.


What lessons should auditors take from how the crisis was handled? Are there any that you now keep in mind in your own work?

Auditors’ work will always have to be based on their professional judgement. This judgement has to be based on a comprehensive knowledge and understanding of the environment the client is operating within. Too many of my colleagues concentrate on following the auditing standards, which is good but not enough. The standards are just a manual to be used as a guide, when questions arise on how to handle certain issues. A tunnel vision is dangerous for auditors; a wider horizon and understanding of the business is vital.


In what ways does Bankers Confidence provide safeguarding against the unforeseeable problems that could arise in the future?

Bankers Confidence’s terms of business agreements with small and medium-sized banks will allow them to use what we call the BC Stamp in their PR materials and inform customers and other stakeholders that they are under our independent scrutiny and protection. This could also mean access to backup funds in case of sudden short-term liquidity requirements and access to high-security data backup. For its own security and to be able to safely offer these services, BC will take over the relevant banks’ internal audit risk reporting function, which will be performed on a daily, live assessment basis.

The members of the Board of Directors of Bankers Confidence are highly skilled professionals that have been carefully selected to ensure a balanced mix of extensive senior management experiences. They have all held very senior positions in both large and small banks and responsibility for risk assessment and management. They have held CEO positions in smaller banks, high-level appointments in the European Commission, within the banking sector and CEO roles in insurance.

Our mission is to become visible within the Global banking sector as the people who introduced a new approach to build trust and confidence in the banking sector. This trust and confidence is still missing, even though it’s been nearly ten years since the 2008 crisis.


What are the next steps in Bankers Confidence’s future development?

We are now in the process of selecting two to three banks to participate in our pilot project. This work will take four to six months and during that period, we should be able to finalise the funding and become fully operational.




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