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Annual Review 2017/2018

EXECUTIVE SUMMARY

THE BSB

The BSB exists to help raise standards of behaviour and competence across the UK banking sector, to the benefit of customers, clients, the economy and society as a whole. It is a private sector body funded by membership subscriptions and open to all banks and building societies operating in the UK.

Through its annual Assessment exercise, policy work, events programme and collaboration with a wide range of organisations in the UK and internationally, the BSB provides challenge, support and scrutiny for firms committed to rebuilding the banking sector’s reputation.

In 2017, the BSB conducted the largest ever survey of behaviour, competence and culture in UK banking. We received over 36,000 responses to our Survey, with a further 750 people participating in detailed focus groups. This research was conducted across different business lines and functions in 25 banks and building societies in locations around the UK. We also interviewed 71 senior executives and board members. Building on our 2016 Survey and assessment of 22 firms, this data allows us to observe the cultures of banks and building societies as seen from significant numbers of people who work there, together with what may be changing over time.

KEY FINDINGS FROM THE 2017 ASSESSMENT

The 2017 Survey results showed improvements from 2016 on 25 of our 36 questions and a decline in none, with the most significant improvements being in employees’ perceptions of their senior leaders, being treated with respect, and their sense of shared purpose. Improvements in employee perceptions were most evident in Retail and in Commercial Banking. While the 2017 results paint a picture of firms moving in the right direction, it is important to emphasise that two data points do not make a trend, and we cannot be certain that these improvements in employee perceptions have translated to improvements in customer and societal outcomes.

On the three themes the BSB set out for 2017/18 our research provides evidence to suggest that:

  • People are more likely to believe that their organisation lives its values if they observe their leaders doing the same, and where they see their firm acting in the interests of its customers or clients. In 2017, on average 69% of employees saw no conflict between their organisation’s values and the way in which business was done. While a 6 percentage point improvement from 2016, there was a significant range within and between firms on this question. It is what senior leaders do, and not just what they say, that makes a difference. In areas where employees observed close alignment between values and business practices, they said that their leaders did not just talk about their firm’s values, but that they did so without cynicism and demonstrated them to guide their day-to-day actions. They observed consistent, practical and relatable communications from their leaders, coupled with a genuine desire to listen and respond to feedback. They also felt that their firm’s values were reflected in the products offered to customers. In contrast, in areas of greater perceived conflict, people said that their leaders did not clearly explain decisions or how they fitted with the firm’s overall strategy, and felt that the need to reduce costs or maximise short-term profits was prioritised over achieving good customer outcomes.
  • Employees’ perceptions of whether they and their colleagues are treated fairly and with respect is strongly associated with their wellbeing. In 2017, 26% of people felt that working in their organisation was having a negative impact on their health and wellbeing. As in 2016, this was one of the lowest-scoring areas of the BSB’s Survey, across all areas of banking. People working in investment banking, were the least likely to see pressure in their roles as excessive, yet more likely to experience work having a negative impact on their wellbeing, suggesting their concept what is ‘excessive’ differs from other areas in banking. In areas of firms with the lowest scores for this question, employees commonly described what they saw as inconsistent and unfair treatment within their organisation of different departments, teams or geographic areas. People from most business areas gave examples of wellbeing support and services provided by their firm (helplines, health checks, gym membership, etc.), which suggests that this provision is not on its own enough to achieve good wellbeing outcomes. Equally, other initiatives such as flexible working were described in some areas as positive, and more negatively in others, with a key differentiating factor appearing to be the extent to which people felt trusted to do their jobs.
  • While some employees do not speak up because they fear negative consequences, a belief that nothing will be done to address their concerns is an equally important barrier. 60% of employees reported that they would not be worried about negative consequences for themselves if they raised concerns, from 57% in 2016, with still over a quarter of people fearing such consequences. Employees in areas of firms with the lowest scores for questions related to speaking up consistently referred to a culture of fear and blame, and often spoke about their organisation as being hierarchical. Of the reasons given for not wanting to raise concerns, those most frequently given were fear that doing so would be held against them, or that it would not be kept confidential. Equally important, though, was the belief that nothing would be done to address the issue, with employees in lower-scoring areas highlighting working environments in which changes perceived as flawed were pushed through with little or no consultation of those affected.
OUR WORK IN 2017

The BSB continues to work with its member firms and others, including regulators, investors, consumer bodies, professional bodies, trades unions and leading academics, to identify how to achieve high standards of behaviour and competence in banking. In 2017, this work included a range of projects and programmes:

  • Consulting on a new Consumer Framework to identify what good banking outcomes look like to consumers. Developed in consultation with consumer and civil society organisations, we received over 80 responses.
  • Publishing a set of guiding principles to help and challenge firms in seeking to raise standards of professionalism. Developed with the support of our Professionalism Forum, chaired by Sir Brendan Barber and attended by a broad range of interested stakeholders and subject matter experts, we propose that firms use these principles to inform their work.
  • Publishing additional detailed statements of good practice to help make a success of the Certification Regime. Building on the good practice guidance published in 2017, our latest guidance – published in February – focuses on risks and issues that may call in to question an individual’s fitness and/or propriety, and provides firms with a series of real-life case studies and examples drawn from our Certification Regime Working Group.
  • Commissioning a comprehensive review of academic literature relating to wellbeing in the workplace, to better understand the theoretical and empirical work that has been done on this subject across different disciplines and sectors.
  • An innovative events programme that brought to the banking industry insights from leaders in other industries such as healthcare and defence, and innovative techniques from academic experts in culture and behaviour. An example of the latter was our ethnography programme, which gave practitioners practical tools to allow them to observe behaviour in their respective organisations.
2018 AND ONWARDS

We will build on this work in 2018 in a number of ways, including those described here:

  • Launching an Insights Unit that will seek to identify and understand cultural factors that enable, promote or inhibit high standards in banking. Over time this unit will also seek to test the effectiveness of interventions designed to overcome such barriers.
  • Running the Assessment for a third consecutive year with a greater number of firms.
  • Creating a BSB Member Panel comprising senior practitioners from our member firms. The Panel will discuss ways to raise standards of professionalism, referencing the BSB’s Professionalism Principles, supported by task-specific working groups.
  • Continuing to develop the BSB’s three themes of reducing the gap between values and how business is done; encouraging a culture of accountability and responsibility but not blame; and improving employee wellbeing in the interests of customers, society and employees themselves, including through our Assessment and Insights work.
  • Publishing a response to our consultation on our Consumer Framework, including next steps for better understanding consumer outcomes more broadly.
  • Expanding our events programme, focusing in particular on facilitating the exchange of ideas between our member firms, to allow them to learn from each other.
  • Planning to run a second cohort of our ethnography programme, following the success of this initiative last year.

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