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Banking Standards Board publishes Annual Review 2017/2018

The Banking Standards Board (BSB)1 has today (15 March 2018) published its Annual Review 2017/2018. In 2017, the BSB conducted the largest ever survey of behaviour, competence and culture in UK banking. The report published today paints a picture of the banking sector based on the views of more than 36,000 people working in 25 banks and building societies across the UK, and gives an overview of the BSB’s work over the past 12 months.

This is the second year in which the BSB has carried out its annual Assessment. The Survey element of this Assessment contains 36 core questions, each relating to one of the nine characteristics identified by the BSB as associated with a good culture in banking2. Scores in aggregate improved for 25 questions and declined for none. The largest improvements were in questions relating to:

  • employees’ perceptions of their senior leaders;
  • being treated with respect; and
  • employees’ perceptions of shared purpose.

By business area, improvements in employee perceptions were most evident in retail and commercial banking.

Other key themes and findings detailed in the 2017/2018 Annual Review include:

  • the importance of leading by example. People are more likely to believe that their organisation lives its values if they observe their leaders doing the It is not what leaders in the organisation say that makes the difference, but how they are seen to behave;
  • the health and wellbeing of employees remains an area of concern. Overall, the percentage of employees who said that working at their firm had a negative impact on their health was (at 26%) the same in 2017 as in 2016. Perceptions of whether respondents and their colleagues are treated fairly and with respect, is strongly associated with wellbeing; and
  • while some employees do not speak up for fear of the negative consequences of doing so, the belief that nothing will be done even if they do speak up, is an equally important

The Assessment has a quantitative element, based on a survey of employees. In 2017:

  • 36,268 employees from 25 banks and building societies across the UK provided their views through the Survey (compared with 28,122 from 22 firms in 2016)3.

It also has a qualitative element, exploring issues and themes in greater depth. In 2017:

  • 11 of the 25 firms that took part in the Survey, also took part in this qualitative element;
  • 87 focus groups took place involving 761 employees;
  • 71 one-to-one interviews were conducted with senior executives and non- executive directors; and
  • a set of questions was responded to by the chairman and board of every participating

The boards of the banks and building societies that took part in the 2017 Assessment received their individual reports at the end of last year, and firms have been discussing these with the BSB.

The BSB Annual Review gives an overview of the BSB’s wider work designed to achieve higher standards of behaviour and competence in banking. This includes its consultation to identify what good banking outcomes look like to consumers, and the publication of a set of guiding principles to help and challenge firms seeking to raise standards of professionalism.

The report also outlines the BSB’s priorities for the coming year. These include the launch of an Insights Unit which will seek to identify and understand cultural factors that enable, promote or inhibit high standards in banking; continuing to facilitate the identification, development and sharing of good practice; and publishing a response to its consumer outcomes consultation4.

Dame Colette Bowe, Chairman of the BSB, said:

‘It is encouraging that our members have a clear commitment to addressing the challenge of managing their culture, and value the role our Assessment reports are playing in helping firms prioritise efforts and assess progress. The 2017 results paint a picture of firms moving in the right direction. But two years’ results, while encouraging, do not make a trend, and we still have a long way to go.

The focus of the BSB’s work is on trustworthiness: not on whether trust is given, but on whether it is deserved. And while trust can take a long time to earn, trustworthiness is in the hands of firms themselves. A firm cannot decide to be trusted: but it can decide to aim to be worthy of trust.’

Mark Carney, Governor of the Bank of England, said:

‘A clear purpose helps lay the groundwork for better culture. Leaders need to ensure that the purpose of their organisation is always present and anchors its goals, values, and strategy. I support the BSB’s work in this regard and encourage all firms to take advantage of the resources they provide to help improve conduct and culture. This will help organisations consistently challenge themselves and uphold the highest standards.’

Andrew Bailey, Chief Executive Officer of the Financial Conduct Authority, said:

‘For firms to be able to manage their culture, they must first understand it. The Banking Standards Board’s ground-breaking work gives its member firms an important perspective on their own culture, and addresses challenges that the sector collectively needs to overcome in order to serve both its customers and society well.’

Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority, said:

‘The Banking Standards Board’s Annual Review provides further evidence that the culture of firms is shaped most of all by their senior leaders. I welcome the BSB’s work to drive improvement in standards, and to encourage all bank employees to speak up if they have concerns.’

Alison Cottrell, Chief Executive Officer of the BSB, said;

‘An approach such as the BSB’s can work only if firms themselves are committed to making it work. The BSB cannot itself raise standards of behaviour and competence across the banking sector. Only firms can do this. The BSB, can, however, help those firms that wish to do this, through the provision of independent, impartial and informed support and challenge.

The challenges involved in creating and maintaining a good organisational culture are not unique to banking. Given, however, the sector’s size, role and inter- connectedness, the consequences of failing to do so can be particularly far-reaching. Banking is a service sector, and all of those that it serves, and everyone who works in it, should be able to feel proud of it. Ensuring that the UK banking sector is deserving of pride – and worthy of trust – is in the hands of banks and building societies themselves.’

 

Notes to Editors

  1. The Banking Standards Board (BSB) was established in April 2015 with the aim of helping to raise standards of behaviour and competence across the UK banking sector. The BSB is a non-statutory, voluntary membership body open to all banks and building societies operating in the UK, and funded by membership subscriptions. The BSB is chaired by Dame Colette Bowe, and its Deputy Chairman is Sir Brendan Barber. Details of the BSB’s board, whichcomprises both practitioner and non-practitioner members, can be found at https://www.bankingstandardsboard.org.uk/meet-the-board/
  2. The BSB Assessment was developed with the help of leading academics in the fields of organisational psychology and ethnography from the London Business School and London School of Economics. It does not measure or rank culture as such; rather, it examines how far a firm demonstrates characteristics (honesty, respect, openness, accountability, competence, reliability, responsiveness, personal and organisational resilience and shared purpose) that the BSB expects to be associated with any good culture in banking.
  3. The following 25 firms took part in the 2017 Survey: Aldermore Bank, Bank of Ireland UK, Barclays, Buckinghamshire Building Society, Cambridge & Counties Bank, Charity Bank, Citi, The Co-operative Bank, CYBG, Ecology Building Society, Handelsbanken, HSBC Bank, Ipswich Building Society, Lloyds Banking Group, Morgan Stanley International, Nationwide Building Society, OneSavings Bank, Paragon Bank, Penrith Building Society, RBS, Santander UK, Standard Chartered, State Bank of India, Tesco Bank and Unity Trust Bank. Of those, the 11 following firms took part in the full Assessment, including focus groups and interviews in addition to completing the Survey: Barclays, Citi, The Co-operative Bank, HSBC Bank, Lloyds Banking Group, Morgan Stanley International, Nationwide Building Society, RBS, Santander UK, Standard Chartered and State Bank of
  4. Please click here to access the BSB Annual Review 2017/2018: https://www.bankingstandardsboard.org.uk/annual-review-2017-2018