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Banking culture is changing, but it will take time (and support)

Posted by on in Banking and Finance

Over the past six years, barely a week has gone by where bankers aren’t being criticised in the media spotlight. Yes, we do need to report issues of rigging, fines and misdemeanours but, as with most cases of rehabilitation, culture change in banking is also heavily reliant on our support.

Regulation will help to curb excessive risk-taking, as Mark Carney has frequently implored, but as many senior financial figures have stated the weight of regulation can also stifle the progress of reform. Hefty fines do serve a purpose in the short term, but sustainable and successful industries are based on a system of self-regulation that takes time to develop. If ethical behaviour is the end-goal then right now banking is in the foothills of cultural reform, by its own admission.

Even the large institutions are starting to realise that “cultural complacency” – as Martin Wheatley, chief executive of the FCA, referred to it – will inevitably drive long-standing customers into the arms of competitors who openly provide a more ethical service. It is the responsibility of policy-makers to ensure an environment that does not incentivise bad behaviour. It’s the responsibility of banks to align themselves with consumer attitudes and the demands of their market.

We’ve seen the throng of challenger banks rise over the past five years, which means there are now more places to deposit your money than ever before. Their progress is impressive when you look at the figures: the challengers’ share of gross mortgage lending rose from 17.5% in 2011 to 28.8% in 2013, according to Investec…and that share is still rising.

So, how do banks begin to create their own cultural framework to live by? TSB are a good example, having adopted a reward strategy that gives every member of staff £100 worth of company shares. As with John Lewis, one aim is to promote high sustainable performance within the business that employees themselves can benefit from. More than that, it’s a symbolic gesture that embeds a level of trust between employer and employee that’s deeper than, “Can you hit a sales target?”

Lloyds scrapped quarterly sales targets last year in an effort to restructure their bonus system. Commission at Lloyds is now partly based on customer feedback rather than product sales alone. Elsewhere, Goldman Sachs has opted to improve the experience of their junior bankers by banning them from the office between the hours of 9pm on Friday and 9am on Sunday. It’s a smart move that certainly encourages better working conditions and a more sustainable attitude towards work among the next generation of bankers.

We are seeing pockets of change already but initiatives like these are just the beginning. Banks are now seeking to outdo each other in terms of service to their community, not just competing to offer the most attractive rates on the high-street. Widespread cultural change is the goal, but that will take time and, more importantly, support if it is to impact across all levels of the financial sector.

To find out more about how banks are approaching culture change, click here.

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Guest Tuesday, 28 March 2017

Cary CooperGood Day at Work™

The new wellbeing resources hub founded by @profcarycooper and Roberston Cooper. Join for FREE and access blogs, videos, downloads, podcasts and more.

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MD of Cary Cooper's business psychology firm, Robertson Cooper - for all things wellbeing, engagement and resilience at work.

Cary CooperCary on Twitter

Professor Cary Cooper, Director and Founder of Robertson Cooper Ltd, Distinguished Professor of Organizational Psychology and Health at Manchester Business School.

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