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Annual Review 2016/2017


2016 was a landmark year for the Banking Standards Board (BSB); one in which we opened for membership, undertook significant pieces of policy work, designed and carried out our first annual Assessment, and collaborated with a wide range of organisations in the UK and internationally.

This Annual Review provides an overview of our work to date, sets out our priorities for the coming year and reports publicly on the overall outcomes of the 2016 Assessment. The boards of the 22 member banks and building societies that took part in the Assessment have received their individual reports, and these are being discussed with each firm.

The BSB Assessment exercise does not measure or rank ‘culture’. It asks instead how far a firm demonstrates characteristics (honesty, respect, openness, accountability, competence, reliability, responsiveness, personal and organisational resilience, and shared purpose) that we would expect to be associated with any good culture in banking, and examines this both within a firm and relative to other firms.

This Review draws on the Assessment evidence to make a number of general observations about banking sector firms. Perhaps the most striking aspect of the results is, however, the degree of variation among firms.

For any statement made about firms as a whole, there will be some firms for which it will be either overly positive or unduly negative, and neither end of the spectrum is the prerogative of any one type of firm or business model. To state the obvious (but an ‘obvious’ supported by our evidence); all banks and building societies are not the same. The sector contains, as very often do firms themselves, examples of both poor and good practice. 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.

As the 2016 BSB Survey was the first of its kind, its results cannot tell us anything about the direction or pace of change. While we are aware of the efforts being made by many member firms, we have not therefore commented in this report on progress over the year. Our findings do, however, provide the baseline against which change can be measured in 2017.

That many firms in the banking sector are committed to achieving and maintaining high standards of behaviour and competence is clear, not only from our work but from the existence of the BSB itself. BSB membership is not an easy option. It demands a readiness on the part of boards and executive teams to ask questions of themselves and their employees that may result in uncomfortable or unexpected answers.

These answers showed, in 2016, both strengths and areas in need of improvement within and across firms.

Informed by the Assessment results, and taking into account also the BSB’s remit and its facilitative, impartial and non-regulatory role, our work over the coming year will be shaped around three themes:

  • understanding and helping to address an apparent mismatch in many firms between the values espoused by the firm and the way that some employees see business being done;
  • helping to develop a culture within the banking sector of responsibility and accountability rather than of blame. Good customer and client service requires a culture in which poor performance and behaviour have consequences, certainly; but it also requires one in which mistakes are learned from, ideas encouraged, professionalism prized and a diversity of views valued and fostered; and
  • identifying practical steps to help promote personal resilience and well-being among employees, so that employees working in UK banks and building societies are able to serve their customers and clients well.

In exploring these issues the BSB will not only lead work but also, as appropriate, support or partner with organisations sharing similar or complementary aims, including in other jurisdictions and outside the banking sector.

We will also build on two areas of work initiated in 2016 around professionalism, and therefore of particular relevance to the second of our themes.

First, and following publication of our Statement of Good Practice on assessing fitness and propriety under the new Certification Regime, we will develop additional guidance on both Certification and Regulatory References.

Second, we will explore further the role of professional bodies and professional qualifications in banking, working with both firms and professional bodies through a new Professionalism Forum to be chaired by Sir Brendan Barber.

The commitment of employees at all levels in banks and building societies to serving their customers, members and clients is clear. Equally clear, however, is that the sector has a considerable way to go in demonstrating consistently the honesty, reliability and competence that BSB Board member Professor Onora O’Neill has described as constituting ‘trustworthiness’. Raising standards of behaviour and competence across the sector – and not being satisfied simply with tackling poor practice, but drawing on good practice to aim higher still – will require consistent, concerted and genuine effort.

The BSB will not itself raise standards in the banking sector. Only banks and building societies can do that. In providing impartial evidence and challenge, identifying good practice and facilitating learning from other sectors, the BSB can however help firms that are committed to managing their cultures, do better what they say they want to do.

The challenge of creating or maintaining a good organisational culture is not unique to banking, or indeed to the UK or the 21st century. 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 not simply a challenge; it is a responsibility, and one that needs to be owned by every bank and building society today.


Alison Cottrell, Chief Executive



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.


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.


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.



If your bank/building society has not responded adequately, or in time, to a complaint that you have already made, you can register your complaint with the Financial Ombudsman Service. Which offers a guide on consumer rights when taking a complaint to the Financial Ombudsman Service.


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If you are seeking the services of an independent financial adviser, Unbiased may be able to help, or if you are looking for more general financial guidance, the Money Advice Service may be a useful place to start.