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Banking Standards Board challenges banks and building societies to promote high standards of professionalism

The Banking Standards Board has today published the BSB Statement of Principles for Strengthening Professionalism – the role of the firm. These principles are intended to help firms consider their own internal practices. This work builds on regulatory initiatives, such as the Senior Managers and Certification Regimes, and reflects the expectations of customers and clients of UK banks and building societies.

The Statement of Principles is an output of a year-long BSB project to explore ways of strengthening professionalism in the UK banking sector for the benefit of employees, customers, clients and wider society.  In April 2017 the BSB established a Professionalism Forum and Working Group, chaired by Sir Brendan Barber and bringing together BSB member firms, professional bodies, regulators, trade unions, academics and other experts.

The BSB’s 2017/2018 Annual Review will be published on 15 March. The report will outline the BSB’s work on Professionalism and other areas of focus, and paint a picture of the UK banking sector based on the views of thousands of employees in UK banks and building societies.

Sir Brendan Barber, Deputy Chairman of the BSB, said:

‘Our Forum discussions focused on how to achieve high standards of professionalism, not just in traditional retail banking roles but across all areas of banking. Qualifications can have an important role to play, but we need to think more broadly in an industry that is being reshaped by technology and data, and that requires new and diverse talents and skills to meet its customers’ needs. The principles published today challenge the leaders of banks and building societies to invest in their employees, and ensure a sustained focus on serving customers, clients and broader society. I am grateful to everyone involved in the Forum for their valuable contributions to this work.’

Joe Garner, Chief Executive of Nationwide Building Society, said:

‘As a mutual, Nationwide is guided by a binding social purpose. We therefore passionately support the focus for firms to be equipped to act in the interests of wider society.  And when trust in business remains so fragile, strengthening professionalism is crucial to ensuring public confidence.  The principles set out by the BSB are a welcome roadmap for this journey’.

David Duffy, Chief Executive of CYBG, said:

‘The Banking Standards Board plays a vital role in building trust and confidence in the financial services industry with customers. The launch of the new statement of principles underlines the industry’s commitment to continuing to uphold the highest standards of professionalism.’

 

Notes for Editors

  1. The Banking Standards Board (BSB) was established in 2015 to help raise standards of competence and behaviour across all banks and building societies doing business in the UK.
  2. Chaired by Dame Colette Bowe, the BSB is an independent, impartial and challenging champion of better banking standards. It is not a regulator or a lobby group; but is working with banks and building societies, their customers and staff and a range of other stakeholders to improve standards.The BSB is focused on understanding and assessing the culture of banks and building societies, identifying shortcomings, recognising progress and developing good practice to improve the trustworthiness of banking in the UK.
  3. The initiative for the BSB followed an enquiry into professional standards and culture in UK banking by the Parliamentary Commission on Banking Standards (PCBS). Its 2013 report concluded that banking did “not possess sufficient characteristics of a profession to lend itself to direct control through a professional body”, but that it could draw lessons from the professions that “espouse a strong duty of trust, both towards clients and towards upholding the reputation of the profession as a whole. In contrast … banking culture has all too often been characterised by an absence of any sense of duty to the customer and a similar absence of any sense of collective responsibility to uphold the reputation of the industry.”
  4. In 2015, the BSB commissioned and published a study by the University of Leeds into the role of professional bodies and professional qualifications in the UK banking sector. The report concluded that the potential existed for professional bodies to play a significant role in raising levels of competence and ethical behaviour, but that a number of challenges needed to be addressed for this potential to be fulfilled.
  5. The BSB launched its Professionalism Forum in April 2017, chaired by Sir Brendan Barber (BSB Deputy Chairman, Chairman of ACAS and former General Secretary of the TUC). It comprises representatives from BSB member firms, professional bodies, regulators, trades unions, trade bodies, academics and other experts. The work of the Forum has been supported by a smaller working group comprising representatives from banks, building societies and professional bodies.
  6. The BSB’s Statement of Principles for Strengthening Professionalism – the role of the firm was developed with the support of the Forum. These principles define professionalism in banking as referring to the attitudes, judgement and high standards of behaviour, knowledge and skill expected of individuals working in banking. The principles cover a broad range of issues, and are designed to be relevant to all roles in all banks and building societies.
  7. The principles support both the letter and spirit of regulation, particularly relevant regulatory initiatives such as the Senior Managers and Certification Regimes. They are designed to challenge and support leaders of banks and building societies by providing a reference point against which they can evaluate their own policies and practices, and will also be used to help inform the BSB’s future work programme.
  8. The principles complement the other work that the BSB is doing to help raise standards of competence and behaviour in UK banking. This includes the BSB’s good practice guidance on the Certification Regime and its draft Consumer Framework, further details of which can be found on the BSB’s website. The BSB will on 15 March also publish its 2018 Annual Review, which will include the results and insights of its second annual assessment of culture, behaviour and competence in UK banking.

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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