It could take a generation for the UK banking sector to completely transform a culture that has left it dogged by scandal, a report has warned.
The 136-page report, A Report on the Culture of British Retail Banking, released by think-tank New City Agenda and Cass Business School, argued that an aggressive sales culture had driven widespread bad practices, though banks were trying to change this.
But the authors added: “The stakeholders we spoke to emphasised that although the banks are making progress with their culture change projects, there are many barriers that could easily derail these processes.
“These include cultural inertia, becoming overloaded with change initiatives, pervasive short-termism and change initiatives getting lost before they actually get to the frontline.”
According to the report, retail banks and building societies have had to set aside £38.5bn since 2000 to pay for misselling and misconduct.
| Report Recommendations |
Industry should consider culture among frontline staff. Banks should consistently focus on cultural change. Senior managers should try to identify and tackle problems in organisations early on. Senior employees should be held accountable for failings. |
Speaking at the launch of the report, Dame Colette Bowe, chairman of the Banking Standards Review Council, said: “I am more interested in the people that the bank is having to advise than about how you change a working environment.
“That is not about competition. That is about how people work. That is about professionalism. That is about the questions they ask when they do their jobs.”
David Davis MP, one of the founders of New City Agenda, said: “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.”
In a recent speech, the FCA’s director of retail banking, Karina McTeague, said: “It is clear to me that most boards of big firms understand that they need to put customers at the heart of their businesses.
“The task for firms is now to embed.”
Adviser view
Alan Solomons, director of London-based Alpha Investments & Financial Planning, said: “I would say banking needs a lot more training and qualification requirements. They need the equivalent of the retail distribution review.”
