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BSB Annual Review 2018/2019 – Speaking up matters; but it needs firms to listen and respond

The Banking Standards Board (BSB) today (2 April 2019) released its Annual Review 2018/2019. This includes the results of the third annual BSB Assessment; an exercise designed to inform, support and challenge banks and building societies committed to managing their cultures and raising standards of behaviour and competence across the sector.

26 firms participated in the 2018 Assessment. More than 72,000 people across all business areas and levels of seniority, and across the UK, responded to the BSB Survey. This followed 36,000 responses in 2017 and 28,000 in 2016. The core survey questions are consistent over time and the responses comparable across firms and business areas, enabling progress to be assessed in both absolute and relative terms. The 2018 Survey also contained one-off questions relating to speaking up, wellbeing and equality of opportunity by gender.

The BSB also explored these themes and one more – customer focus – in more detail through focus groups (hearing from 837 employees around the UK), asking questions of boards, and talking individually with 71 senior executives and non-executive board members.i

2018 saw the Survey run for the first time outside the UK banking sector, both with the non-UK banking operations of some member firms, and with member firm non-banking operations in the UK). The BSB also ran the Survey for a number of banks in Ireland, providing a first year of baseline data for these firms and for the newly established Irish Banking Culture Board.

KEY FINDINGS FROM THE SURVEY

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.

Other key findings from the 2018 Survey include:

  • in the context of largely unchanged headline Survey scores in 2018, perceptions of leaders continue to improve;
  • ‘listening up’ in firms is as much of an issue as speaking up;
  • 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;
  • customer-facing employees point to the complexity of internal systems and processes as the main barrier to being able to serve customers well; and
  • 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

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. 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:

  • understanding social purpose and 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.

Dame Colette Bowe, Chairman of the BSB, said:
“The BSB’s third Assessment of culture, behaviour and competence in UK banking shows an overall picture of uneven progress in 2018.

From the many discussions we have had with firms, we would say: these results are telling us that, making continuing significant changes to the method of operation of large and/or long-established businesses is a hard slog, and that many firms are in the hard yards of achieving progress in improving their culture.

Rebuilding trust, and making themselves worthy of being trusted, is a long job. But the very fact of the existence of the BSB, and the participation of leading firms in our industry, is an important measure of firms’ commitment to the job.”

Alison Cottrell, Chief Executive of the BSB, said:
“Raising standards of behaviour and competence across the banking sector is, for firms, a collective as well as an individual challenge. More than this, it is a responsibility and an opportunity. In an environment of ongoing change, having the right culture — a culture that promotes high standards, and produces good outcomes for customers, clients, members, employees, the economy and society as a whole on a sustainable basis — becomes all the more important. Even standing still, in such a context, may take considerable effort. Simply standing still, however, is not enough.”

Mark Carney, Governor of the Bank of England, said:
“Firms are responsible for creating sound cultures in financial services. This requires leaders who are prepared to ask uncomfortable questions, and more importantly, are prepared to listen to uncomfortable answers. The BSB provides a valuable resource for firms which are committed to
raising their standards.”

Baroness Onora O’Neill, Professor Emeritus of Philosophy at Cambridge University, said:
“The standard that matters most in banking and financial services is not trust, but trustworthiness. Being trustworthy has three elements; honesty, reliability and competence. Regulation alone cannot produce trustworthiness. That responsibility sits with firms themselves in the organisational cultures they create, manage or tolerate. The work of the Banking Standards Board – providing independent support and challenge and identifying and sharing good practice – should be part of the toolkit of any firm that takes its culture seriously.”

WATCH: BSB SURVEY METHODOLOGY EXPLAINED

Notes to Editors:

i 72,024 employees at 26 firms responded to the BSB Survey in 2018; this followed 36,268 respondents in 2017 and 28,113 in 2016. Nine firms in 2018 also took part in the qualitative Assessment exercise, during which we listened to 837 employees in 89 focus groups around the UK and interviewed 59 senior executives and 12 non- executive directors. The firms that took part in 2018, with those that participated in the qualitative excercise in bold, were: Atom 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, Lloyds Banking Group, Morgan Stanley, Nationwide Building Society, OneSavings Bank, Paragon Bank, Penrith Building Society, RBS, Redwood Bank, Santander, Standard Chartered, State Bank of India, Tesco Bank, Unity Trust Bank, Vanquis Bank.