Reframing ethical banking: Dimensions of governance and customer perspectives on universal bank practices in the post-pandemic Philippines

Abstract

Ethical dilemmas in banking—ranging from conflicts of interest to weak consumer protection—pose persistent challenges for universal banks tasked with balancing profit motives and public accountability. The COVID-19 pandemic intensified these tensions, reshaping regulatory expectations, accelerating digital transformations, and raising new concerns over transparency, client trust, and institutional integrity. Despite these developments, there remains a limited understanding of how universal banks in developing economies, particularly in the Philippines, have realigned their ethical practices in response to the pandemic’s governance implications. Anchored in public administration and stakeholder theories, this study investigates the evolving contours of ethical banking practices through the lens of customer experience in Davao City. Utilizing a descriptive-exploratory design and exploratory factor analysis (EFA), data were gathered from 202 universal bank clients using a 45-item scale instrument developed from in-depth interviews. The results surfaced five critical dimensions of ethical banking: security and fraud prevention, customer relationship and support, digital banking and payment innovation, credit management and monitoring, and lending flexibility and support. These findings not only contribute to the empirical refinement of ethical banking frameworks but also offer actionable insights for regulators, financial intermediaries, and policymakers aiming to uphold ethical standards in line with the Financial Consumer Protection Act (RA 11765), BSP Circular No. 1140 on cybersecurity, and the broader public governance agenda of inclusive and accountable financial systems.