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Blog series – Charles Bowman

In advance of our event at the Bank of England on 21 March 2017, we asked interested parties to write on the theme: Worthy of trust? Law, ethics and culture in banking…

The global financial crisis and the events that followed shook people’s trust in organisations – and in light of this last summer’s Brexit vote, it is clear that trust is more important than ever. There is much to be done to restore trust – creating better businesses that are trusted by society.

The recently published 2017 Edelman Trust Barometer reports the largest ever decline in trust across the institutions of government, media, NGOs and business. The report concludes that:

‘Business finds itself on the brink of distrust,….and, perhaps most concerning for business is the perceived role the public sees business playing in stoking their fears.’

And, so why is trust so important?

Because we live in a world of increased connectivity and public scrutiny and in this new world, trust is the glue and the lifeblood of any organisation…the critical asset in ensuring any institution’s long term survival and success.

And, why is trust so important to the City of London specifically?

Because if London is to remain pre-eminent as the global financial services and banking hub, (1) we must demonstrate, internationally, that London continues to be the trusted cluster of choice and (2) at a national level, we have a responsibility to better communicate our story and our value to the society that we are here to serve.

There is no single silver bullet, trust can neither be demanded nor built, it must be earned – and that takes time. As the old Dutch proverb says, trust arrives walking and leaves on a galloping horse.

The re-earning of trust in Banking and financial services will therefore take time. But it must be done and it is this agenda that I intend to focus on over the next year.

Charles Bowman, Partner, PwC

 

Senior Managers and Certification Regime

Exploring how the SMCR - and especially Certification - can be implemented in the most effective way across the sector.

The Senior Managers and Certification Regime is a major regulatory change that will affect all banks and building societies. Responding to recommendations by the Parliamentary Commission on Banking Standards, the government and regulators have together developed a comprehensive framework to ensure better accountability and responsibility for behaviour, competence and culture in banks and building societies. The new framework provides an opportunity for the industry to focus on and demonstrate a culture of professionalism. We are working with firms and regulators to facilitate this, including areas where a common approach across firms could support both the objectives of the regime and the skills and development of the people covered by it.

Professionalism

Evaluating whether a more 'professional' approach to banking would improve behaviour and competence across the industry.

The Parliamentary Commission on Banking Standards found that 'banking culture has all too often been characterised by an absence of any sense of collective responsibility to uphold the reputation of the industry', and argued that a greater focus on professionalism could be an answer to this. Working with a leading team at the University of Leeds, we are researching the issues around professionalism in banking. In particular, we are reviewing how professional qualifications are currently used across the sector, and at whether a stronger role for professional bodies, along the lines seen in some other sectors, like medicine or law, would help raise standards. To inform this work and develop a rounded picture of 'professionalism' and what it means in banking, we are surveying banks and building societies, professional bodies and a wide range of other interested groups, including consumer bodies and investors.

Assessments

Providing an honest and impartial assessment to Boards of progress against objectives on behaviour, competence and culture.

The BSB assessment exercise presents Boards with an objective and impartial view of their firm's culture, identifying where things are working well and recommending areas for improvement. It draws on information not only from Boards and senior teams, but also from employees, investors (or members), trade unions, customer groups and other relevant bodies. In doing so, it will provide constructive challenge to each firm individually, while building a collective understanding of common issues across the industry, or sectors within it. We undertook our first annual assessment exercise in 2015 with ten firms (Barclays, Citi, HSBC Bank, Lloyds Banking Group, Metro Bank, Morgan Stanley International, Nationwide, RBS, Santander UK and Standard Chartered). The BSB itself will not publish individual assessment reports - each firm owns its own report - but key themes and messages will be set out in the BSB's annual report, the first of which will be published in Spring 2016. Given that Board engagement is central to the assessment work, only firms that have their headquarters in the UK are eligible for the full assessment exercise. All firms, including branches of firms headquartered overseas, will however be included in a focused membership-wide survey, which will allow each participating firm to benchmark itself against its peer group.

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ARE YOU CONCERNED ABOUT ACTIVITIES CONDUCTED IN YOUR INDUSTRY?

If you work in the financial services industry and are concerned about any activities conducted by your employer or any other firm or individual, you may find the Financial Conduct Authority and the Prudential Regulation Authority's guidelines on whistleblowing helpful. It explains what constitutes whistleblowing, and what procedures are in place to respond to blow the whistle and how your anonymity would be protected. Public Concern at Work, the whistleblowing charity, also offers support and advice to individuals and employers about how to report concerns and how to establish whistleblowing frameworks.

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