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Annual Review 2018/2019

EXECUTIVE SUMMARY

2018 marked the third year of the BSB’s annual Assessment. This is an exercise designed to inform, support and challenge banks and building societies that are committed to managing their cultures and raising standards of behaviour and competence across the sector, and prepared to invite an independent and comparative perspective in order to help them do this as effectively as possible. 72,024 employees across the UK and at all levels responded to the 2018 Survey, sharing their observations and perspectives on their firms. We also held focus groups with 837 employees to explore particular themes in more detail, received submissions from boards, and talked individually with 71 senior executives and non-executive board members.

Drawing on all of this information enables us to build a picture of how far individual firms, and firms collectively, demonstrate characteristics that we would expect to be associated with good organisational cultures, i.e. cultures that produce good outcomes for a firm’s customers, clients or members, employees, the economy and society as a whole. Participating firms can monitor their progress and that of different business areas within the organisation, both over time and relative to other firms; and looking across the results as a whole, the BSB can identify common themes, emerging issues or areas of good practice that can then be explored with members to promote continuous collective improvement.

Survey scores in 2018 showed, on average, little change across firms as a whole. This followed improvements in most question scores in 2017. The gains of the previous year were therefore maintained in 2018 but not, on aggregate, extended, despite the ongoing investment of time and resource by firms in managing their cultures. The reasons for this could be many and various. ‘Easy wins’ may, for example, have been exhausted, and some initiatives in managing culture may have been less effective than others. Initiatives already underway may prove to be effective, but may not have had time to come to fruition. As banking and society continue to change, banks and building societies will need to persevere in determining what does and does not work.

The scale of participation in the Assessment exercise, as well as firms’ engagement with the BSB’s work more broadly, signals a strong commitment on the part of member firms to continuous improvement and to raising standards across the sector. As we continue to analyse the 2018 results, a number of initial observations can be made that firms will wish to take into account and that will help shape the BSB’s own work over the coming year.

In the context of largely unchanged headline Survey scores in 2018, perceptions of leaders continue to improve

Survey scores were, on average and across all firms, largely unchanged in 2018 (though greater movement was seen between and within firms). Scores relating to perceptions of leaders, however, continued to improve. The Survey question that has seen the largest positive change since it was first asked in 2016, relates to whether employees see senior leaders take responsibility when things go wrong. This ongoing improvement in leadership-related scores comes in the context of a considerable focus on leadership over recent years, and the introduction of the Senior Managers and Certification Regime.

Listening up is as much of an issue as speaking up

Of those employees who said in 2018 that they had wanted over the past year to raise a concern about something at work, 63% said that they had done so. 40% of those who spoke up said, however, that they had not felt listened to or taken seriously, and a further 19% were unsure.

The experience of those who do speak out about something may affect the willingness of others to do likewise (whether that experience is relayed directly or observed at a distance). A firm that wishes to encourage people to say when something is going wrong or could be improved, needs to demonstrate beyond doubt — and keep on demonstrating — that it welcomes feedback and is prepared to listen to it.

Our findings also suggest a mismatch within individual firms between the extent to which those who choose not to speak up, think that they would be listened to and the experience of those who do speak up. These mismatches can run in either direction (i.e. the reality may be better, or worse, than the expectation), posing different challenges for firms in addressing them.

Our 2018 results also suggest that individuals are more likely to be prepared to challenge what they see as behaviour or practices that might damage the firm, its customers or markets than they are to speak up about bullying, discrimination and harassment. Firms need to consider how to encourage speaking up on both organisational issues and personal concerns, recognising in particular the importance of how the firm itself listens and responds, and is seen to listen and respond.

A quarter of banking employees say that working at their firm has a negative impact on their health and wellbeing; a proportion that has barely changed over three years, notwithstanding the attention that firms have been giving this issue

More than four in ten employees who took part in the BSB Survey in 2018 said that they felt under excessive pressure at work. This picture was consistent across all business areas.

A quarter said that working at their firm had an adverse impact on their health and wellbeing, with the most common reasons given for this being an excessive workload, the pressure of expectations and a lack of resources. Issues relating to line management, working relationships and the physical working environment were also frequently mentioned. Some factors were more prevalent in different parts of the banking sector. A relatively high proportion of employees in Retail Branch, for example, cited targets and goals as affecting their health and wellbeing, while in Investment Banking long hours and a poor physical working environment were mentioned more frequently than elsewhere.

This does not of course mean that employees in the banking sector are necessarily under greater pressure than in other sectors, or that an adverse impact of work on wellbeing is particularly marked in banking. The proportions may be higher or lower in other sectors. They may also, within the banking sector itself, have been higher or lower in previous periods. None of this, however, detracts from the need for the banking sector to address its own present problems. Issues around wellbeing and stress matter if we want and expect people to be able to exercise judgement, manage risk, take decisions and demonstrate high standards of behaviour and competence at work.

Customer-facing employees point to the complexity of internal systems and processes as the main barrier to being able to serve customers well

55% of employees said that their firm’s internal processes and practices were a barrier to continuous improvement. This proportion has shown little change over the three years of the Survey. Efforts to address the issue may, however, be starting to have an effect; for the first time in our Survey, ‘innovative’ was more commonly used by employees to describe their firm than ‘bureaucratic’.

As in 2017, 79% of employees said that their firm put customers at the centre of business decisions; 9% disagreed.

Retail and Commercial Banking employees described greater efforts being made by their firms, using different methods and new technology, to provide information in a way that catered to the needs of different customers. Employees in both business areas, however, also referred to insufficient resources or an overly risk-averse approach as constraining them in their efforts to serve customers well.

Perceptions of equality of opportunity between men and women are more positive in business areas where leaders are seen to take responsibility for the need to improve

On average, 83% of men and 80% of women said that opportunities at their firm were equal irrespective of gender. There was some variation between firms and business areas; perceptions among women were most negative in Investment Banking, where 24% of women felt that men had greater opportunities in their firm.

Employees in most focus groups noted the limited representation of women in senior positions at their firm. Other common observations were that:

  • taking maternity or paternity leave hindered career progression;
  • policies to promote gender equality were applied inconsistently across the firm; and
  • their firm’s culture was itself a barrier to gender equality.

In areas of firms that scored relatively highly on perceived equality of opportunity, focus group participants were more likely to talk about gender inequality as a challenge for the firm itself, to be self-critical on the part of the firm, and to refer to senior-sponsored initiatives to raise awareness of gender inequality and address it. In focus groups from lower-scoring business areas, gender tended to be described more as a sector-wide problem than a firm-level issue, and employees were more likely to mention concerns about positive discrimination.

Where leaders take personal ownership of tackling gender inequality and take steps to raise awareness of and tackle the issue in their own firm, employees are more likely to recognise and be critical of the progress the firm still needs to make, but also more likely to see equal opportunities by gender within the firm. Accepting the issue as an industry fact of life, by contrast, does not appear to reduce its resonance within the firm; rather, a perceived reluctance to discuss or take responsibility for tackling gender inequality is associated with employees being less likely to regard opportunities as equal within the firm.

Next steps

Over the coming year, and informed by both the results of the 2018 Assessment and our wider work, the BSB will explore three themes in particular:

  • decision-making – using both the BSB Survey and other approaches to understand better the connection between decision-making, a firm’s social purpose, and outcomes.
  • technology and culture — digging down into the perspectives of the people who design and manage technology for our member firms and their customers or members.
  • speaking up and listening— collaborative work to understand best practice and to share it.

Alongside this, we will continue with work already underway on important topics such as wellbeing, the question of what ‘good’ looks like for consumers of banking services, and (with our Certification Regime Working Group) effective implementation of the Certification Regime. Sharing learning and experience across member firms through BSB events and our Member Forum will remain a key activity. As we continue to analyse the cumulative body of Assessment data and work with member firms and with other organisations (both within and outside the UK banking sector), further topics and issues may of course emerge, and our work programme will be kept under review.

We are continuing to develop the BSB Assessment with a view to making it ever more useful for member firms. The Survey was run in 2018 across different countries and with some non-banking business areas of global banking groups, demonstrating the scalability and applicability of this exercise for international members and firms based outside the UK. While designed with the banking sector in mind, the issues that the Survey explores are not unique to any sector or jurisdiction and we are continuing to talk with a variety of organisations outside the UK banking sector.

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