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Transparency is a big topic in the financial services industry these days, but what that means is often dependent on the context. In theory everyone agrees that transparency is a good thing, but putting it into practice is something else altogether. Although every good business has their own secret sauce, letting customers see how you make the sausage can also be a smart business strategy, particularly for companies in industries that have lost consumer’s faith. Taking steps to show you’ve got nothing to hide can go a long way toward rebuilding that lost trust. Our society has become much more cynical and less willing to accept things at face value. It’s no wonder that many people feel that big companies are out to screw them. The worldwide financial crisis left a large swath of the public feeling victimized by Wall Street and the big banks. After seeing that the largest banks and insurance companies can fail, individuals don’t know who they can trust, so they don’t trust anyone.The never-ending discoveries of bad behavior by Wells Fargo reflect poorly on the banking industry as a whole, while the massive Equifax security breach just adds more frustration into the mix. The public didn’t find out about the breach until more than a month after it happened, while three of the firm’s top execs, including the top financial guy, sold $1.8 million worth of stock in the first few days after it was discovered internally, a move that looks like insider trading at its worst.Americans are already skeptical regarding the trustworthiness of many financial firms, and the push to do away with as much regulation as possible under the Trump administration is only adding fuel to the belief that Wall Street is getting rich at the expense of Main Street.When Tom Farley, president of the group which operates the New York Stock Exchange recently testified before Congress, he urged legislators to rescind the regulation under Sarbanes-Oxley that requires outside auditors to report on the financial controls in place at publicly-held companies, calling it expensive and cumbersome. He identifies the burden of compliance as the reason that more firms are looking to be acquired in private equity transactions instead of making initial public offerings (IPOs).He also made the point that the NYSE has “a strong appreciation for the importance of corporate responsibility including efforts across the environmental, social and governance space. Many of our listed companies have implemented innovative and impactful initiatives that exemplify what it means to be a good corporate citizen, including those devoted to ESG.”I’m certain that what Farley says is true, about NYSE members and good corporate citizenship, but, as he acknowledges, he’s speaking of many of the listed companies, not all of them. One bad actor—think Wells Fargo—can damage the reputation of an entire industry. Related: Has Wells Fargo Become the Least Trusted Company in the Banking Industry? A study by the American Accounting Association underscores the need for this kind of transparency. I won’t bore you with all the details here, but the study examined the internal controls on financial reporting for thousands of public companies each year over a four-year period. They found about 1,500 instances of material weakness, with 127 of those companies accused of fraud, with the CEOs and CFOs facing charges in almost all cases. Granted, the fraud numbers are not large compared to the total number of publicly-traded companies in the U.S., but they’re a lot higher than they should be with such stringent regulations in place. What if more companies thought they could get away with the accounting shenanigans pulled by Enron and WorldCom?There’s also the heartening news from a study by Glass, Lewis & Company showing that companies with poor accounting practices also trail their peers in terms of performance. And Ernst & Young, admittedly a party unlikely to be neutral when it comes to outside auditors, finds that the requirement reduces the need for revising financial statements while also increasing investor confidence.There’s no denying that people want transparency in their business dealings. They want to know what they are paying for and to get good value for what they spend. If the financial service industry ever wants to win back the loyalty of the American investing public, they’d be wise to pencil in increased transparency at the top of their to-do list.