Mortgage News
Banks must replace the oil tanker with nifty yachts
RBS’s recent fine for mis-selling is now its sixth from the regulator in four years and the banking sector in general has sadly not behaved much better. We all know of Barclays and Libor (not the only bank caught in this one) and Lloyds and PPI (ditto).
Despite the corporate culture change programmes underway in all the banks, their customer charters and massive advertising budgets to communicate they are now ‘nicer’ organisations, it seems they still have a long way to go.
Does this really matter to anyone else but the banks? In reality all of us who work in the financial services sector, whether you’re a broker, IFA or a building society, will sadly be tarnished to some degree with the same brush. It’s a toxic effect on the sector and that’s no good for anyone’s business.
That’s why rather than joining in the general bank bashing and demanding that perhaps banks be removed from the direct sales market, I believe it’s in our greater interests to see them improve their practices. And, practically removing banks from the mortgage market when they have such a large market share would ultimately not be in the interest of customers; building societies and brokers simply wouldn’t keep up with demand.
I believe the very thing that supposedly makes these banks strong, their size, is also their downfall (never too big too fail). Trying to change the culture in such large organisations is like trying to turn the proverbial oil tanker. I’d suggest the banks need to stop thinking big and start thinking small. Break up that old oil tanker and get some nifty yachts that can adapt and change course more easily.
Banks need to consider placing some of their direct business with brokers, so they can work with their sales teams in smaller groups to develop a great culture and sales practice and then use these to develop larger teams over time.
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For the sake of the financial services sector I hope the banks can adapt their ways, placate their shareholders on short-term sales for long-term cultural improvement and find a fair wind to develop their corporate culture.
Paul Winter is chief executive of Ipswich Building Society