Banking Standards Board review highlights cultural issues

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As someone who works with banks across the world and has held senior HR roles in banks, eg Global Head of Leadership at UBS, this is a never ending issue. The inherent challenge banks have is that ...


Read More Chris Roebuck
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Trust among colleagues and taking responsibility for mistakes are still key challenges in banking

More than a quarter (27%) of banking industry staff would be afraid of negative consequences if they raised concerns about the way they work, according to the Banking Standards Board (BSB) Annual Review 2016/2017.

The review, which considered the views of 28,000 staff from 22 banks and building societies across the UK, highlighted areas of concern for an industry still challenged by a lack of trust. One in five (20%) staff said they do not think their managers take responsibility when things go wrong, and a third (34%) said that colleagues can get defensive when their views are challenged.

More positively, 86% agreed with the statement 'risk and compliance are respected within my organisation', and 75% said customers are at the centre of business decisions.

BSB CEO Alison Cottrell described the high impact of banking culture on the UK. “The challenge of creating or maintaining a good culture is not unique to banking, or indeed to the UK or the 21st century," she said. "The consequences of a poor culture in banking are, however, extraordinarily far-reaching; affecting the economy and society as a whole. For the UK banking sector raising standards of behaviour and competence is a responsibility that needs to be owned by every bank and building society today.”

She added: “All banks and building societies are not the same. The sector contains – as, very often, do firms themselves – examples of both good and poor practice. And being of a particular size, type or business model neither guarantees a good culture nor provides an excuse for failing to achieve a better one."

The report stated that the BSB’s work over the coming year will focus on three distinct themes: understanding and helping to address the mismatch in many firms between the values espoused and the way some employees see business being done, developing a culture within banking of responsibility and accountability rather than blame, and identifying practical steps to help promote personal resilience and wellbeing among employees.

Antonio Simoes, chief executive of HSBC Bank, highlighted the importance of trust. “Ten years on from the beginning of the global financial crisis trust in banks remains the key challenge facing the industry,” he said. “The BSB Annual Review provides an important reference point and a guide for improvement across the sector.”

Comments

As Alison says, this is not unique to banking and yet it does have far reaching consequences. Trust can be measured and improvements in trust can be linked to improvements in loyalty and advocacy. Many "programmes" implemented to address a fundamental lack of trust measure satisfaction and engagement instead - we need to get to the very heart of the issue in order to get the result that we are looking for.


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A very interesting topic in the light of todays issues right at the apex of the Financial Pyramid. I was going to try my Latin,.. but who is checking the applications/CVs or those enticed to apply. Indeed what organisations actually do to check at director/head of function level appointments.


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As someone who works with banks across the world and has held senior HR roles in banks, eg Global Head of Leadership at UBS, this is a never ending issue. The inherent challenge banks have is that they have deliver maximum return for investors, driven by the market and the need to match competitors. Not only that but the major driver of individual remuneration is also delivering the figures. They have to balance this maximisation with regulation, customer service and ethical behaviour. The issues come at the boundary between these where to get that last extra profit there is a temptation to "bend the rules" of whatever type. This creates the climate where few will speak out if they see bad behaviour by colleagues as they know it is implicitly condoned by many middle managers who are under pressure to deliver. Thus in many banks the senior levels of management are often working by the letter and spirit of the new culture expected but at lower levels this is just ticking the boxes to be seen to comply with the letter whilst bending the spirit to meet targets. Senior management levels must recognise that they can't demand ever increasing financial performance under pain of dismissal without staff sacrificing other elements, eg serving the customers interests, to deliver it. However the bigger prize is that if the industry were able to transform the "me not we" culture that currently exists due to the remuneration to a "we not me" team culture the financial returns would actually be greater though additional leverage of the wider organisations capability to service customers. The Harvard Business School Case study on UBS 2002 - 06 showed this really can work. T


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Risk practitioners generally failed to address these underlying human aspects. Since the publication of the Basle accord, ISO 31000 and other standards and regulations, it has often been argued that compliance with these standards and regulations will mitigate and control risk, but this is only true if the standards and regulations are embraced in an effective Enterprise Risk Management Culture. Just like the policies, procedures and systems, these are worthless if human attitude, acceptance and desired response lack. Addressing the aspect of people risk is the only way an organisation can improve the results of how their people respond to a situation of risk and the effectiveness of their risk management function. No organisation can ever have a perfect risk management culture, but organisations can achieve a level of maturity where they have an effective risk culture process and every employee is risk-minded and does something on a daily basis to mitigate, control and optimize risk The development of Risk Culture Building is focused on awareness and training in business ethics and human behaviour, as mentioned, both the behaviours we want to encourage and the behaviours we want to avoid. Organisations should frequently evaluate the progress (or regress) they are making on the path to maturity and implement action plans.


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