Culture of UK banks must change
So far banks have had to pay £38.5bn in fines and redress over the last 15 years, with £27bn going to the mis-selling of payment protection insurance alone.
The report, Culture of British Retail Banking, highlights what it deems to be a poisonous sales culture, with staff in branches receiving cash bonuses, iPods and tickets to Wimbledon for hitting ambitious sales targets, while those who failed to do so were humiliated by having cabbages and other vegetables placed on their desks.
Professor Andre Spicer, report author, said: “A few years ago it became clear Britain’s banks were broken. A toxic sales culture had taken hold and public trust was at an all-time low.
“We wanted to find out how they were being repaired. We found that some progress has been made.
“Regulation has improved, and big banks have all implemented new programmes to improve their cultures. Smaller banks and challenger banks are beginning to offer the customer real choice, and often have healthier cultures.”
Lord McFall, former chairman of the Treasury Select Committee said: “The need for culture change has been recognised, but it has to be transmitted all the way from the top to the bottom of these huge organisations.
“The Banking Standards Review Council has a unique opportunity to improve standards and professionalism in the sector.
“It should keep parliament up to date with the sector’s progress by presenting its findings to the Treasury Select Committee on an annual basis.
“It should also take all necessary steps, including those we recommend, to safeguard its independence and credibility.”
The Most Reverend and Right Honourable Justin Welby Archbishop of Canterbury, added: “The report is a timely and important piece of work that puts culture change front and centre of the agenda for reforming our banking system.
“It is clear that much more needs to be done by all stakeholders for trust to be restored in our financial institutions, and this report sets out clearly how banks are trying to do this and where improvements clearly still need to be made. The huge fines levied on a number of major banks on 12th November 2014 illustrate the length of the journey of culture change that still needs to be travelled.”
And David Davis, the Conservative MP for Haltemprice and Howden, said: “It has become clear that having an aggressive sales culture, which ripped-off customers, has cost banks dearly. Scandals have cost retail banks and building societies an eye-watering £38.5 billion in fines and redress for customers over the last fifteen years.
“Banks seem to be trying to change, and some organisational progress has been made. However, it has yet to deliver for high-street customers. A toxic culture which was decades in the making will take a generation to turn around. At this crucial juncture, Britain’s biggest banks cannot afford to let the better treatment of customers become a second order priority.”