The UK High Street Banks – Are Olympic Standards Possible?
They were incredible events weren’t they?!
The Olympics & Paralympics proved to be absolutely outstanding, surpassing the expectations of even the most enthusiastic supporter of these events.
Listening to people on TV & radio, and chatting to friends, all talk was about the bravery, sheer excellence and wonderful spirit amongst the athletes.
The helpers helped superbly, the audience cheered and clapped their hearts out and even the weather did everyone proud for virtually the whole games!
Now, a few weeks later, and like all great events and occasions, the memories fade a little, but that overall feeling that we are much the better for experiencing these Olympics is still there.
So why do you think they made such a profound and deep impression?
Various theories have been put forward, but I think that it is basically very simple – we have got used to low standards.
Low standards of behaviour and performance and in many cases a total lack of integrity from those we encounter day to day or trust to exercise power on our behalf.
Whether it is MPs, bankers or premiership footballers, we have become very cynical and understandably so, as we find out what they get up to.
So encountering events which are the very opposite of what we are used to is incredibly refreshing.
Asking around I heard words such as:
Dedication – honesty – integrity – effort – skill – endurance – camaraderie – modesty – values – leadership – genuine – being the best you can be.
So I had these very much in mind when I was looking at a subject to write about for Financial Tips this month.
There were two recent surveys that stood out and they particularly resonated because they jarred with the values of the Olympics.
The first survey was by the Financial Services Authority (FSA) into the sales practises of banks.
It found 20 out of the 22 firms assessed had features within their incentive schemes that increased the risk of mis-selling!
In an article in New Model Adviser, it showed that the failings included:
Firms failing to identify how incentive schemes might encourage staff to mis-sell, suggesting they had not properly thought about the risks or simply turned a blind eye to them
Firms failing to understand their own incentive schemes because they were so complex, therefore making it harder to control them
Firms relying too much on routine monitoring of staff rather than taking account of the specific features of their incentive schemes
Sales managers with clear conflicts of interests, such as a responsibility to manage the conduct of sales staff whilst themselves able to earn a bonus if their team made more sales
Firms not doing enough to control the risk of mis-selling in face to face situations.
The FSA cited a case where one firm worked on a ‘first past the post’ system in which the first 21 sales members to reach a target would earn a ‘super bonus’ of AÃ¯Â¿Â½10,000.
Another firm grossly incentivised one product over others despite claiming to offer impartial advice and allowed the risk that its advisers would sell the product that earned them the most.
In another case it found a firm offered sales staff a 100% bonus of their basic salary if they sold payment protection insurance to at least half their customers.
Perhaps a good summary came from founder Martin Lewis, who has argued that problems within banks’ sales cultures go beyond incentives and stem from poorly trained staff “dressed up as advisers” who do not have the “moral compass” to know they are misselling.
NOT Olympic standard then!
The second survey was also about banks, but this time into their overall customer service, and was carried out by Which?
The following shows their findings of the financial brands ranked by their customers showing ranking & overall score:
First Direct – 86%
The One Account – 80%
Co-operative Bank – 79%
Smile – 78%
Coventry Building Society – 74%
ING – 74%
Saga – 71%
Nationwide – 69%
Yorkshire Building Society – 69%
Marks & Spencer – 67%
Intelligent Finance – 65%
Britannia – 64%
Tesco Bank – 63%
Yorkshire Bank – 61%
Sainsbury’s Finance – 61%
HSBC – 60%
AA – 60%