Which? said that recent banking scandals meant there was an urgent need for a “fundamental change” in banking culture and practice.
According to a Which? survey of 2,060 people, only one in 10 people, or 11% said they trust bankers to act in their best interests. More people say they distrust bankers than estate agents, 65% compared to 51%, and a mere 6% of people say they associate ethical behaviour with bankers. Just one in 10 people surveyed think that bankers are well regulated.
Which?’s big change campaign is calling for:
– Pay and bonus schemes that prioritise customers, not sales
– The introduction of an independent professional standards body to ensure individuals comply with a code of conduct and senior bankers have compulsory qualifications and training in ethical behaviour and resolving conflicts of interest
– Senior executives to be held accountable for mis-selilng and poor conduct, with stronger criminal sanctions for those who have presided over bad practises and the power to claw-back large bonuses
Richard Lloyd, executive director of Which?, said: “We’d thought we’d seen banking at its lowest point when the public were forced to bail out the banks, but since then we’ve seen the Libor rate-rigging scandal and continued mis-selling. All the while the bankers who presided over corruption continue to enjoy hugely inflated pay and bonuses.
“Consumers are continually being short changed – we need to see ‘Big Change’ in banking now. Customer service should come before sales, standards and ethics must improve, and bankers must be held to account. We want banks for customers, not bankers.”
Anthony Browne, chief executive of the British Bankers’ Association, added: “Banks are fully aware that they need to restore customers’ trust and that this can only be done by proving that they are on the customers’ side. There is absolutely no room for bad behaviour and the industry is committed to ensuring that codes of practice and ethics are rigorously upheld and that customers’ interest are put first.
“There has already been a huge amount of change in the industry: new regulations to increase banks’ strength; more protection for depositors and changes in top management. Remuneration is now under much greater scrutiny – performance payments now have to be deferred to ensure that they reflect future value to the business and the amount that can be paid in cash is strictly limited.
“There is more that can and will be done; there is a genuine commitment from the top of the banks to restore the reputation not just of the industry, but of London as the world’s leading financial centre.”
Earlier this month the Financial Services Authority blasted the banks over a culture of sales following a review that found rewards put in place by banks were the main reason for poor service.
The regulator warned financial firms they risk mis-selling to consumers, even with the abolition of commission, if they remunerate their staff based on sales targets.
