Culture change in banks may take a generation

At the current rate of change, it will take the financial services sector a generation to completely overhaul its culture and practices, says a new report from the think tank New City Agenda (recently founded by Lord McFall, the David Davis MP and Lord Sharkey) and Cass Business School.

The report on the culture of British retail banking maintains that progress is slow because an entire generation of staff have been raised, and in some instances promoted, in an aggressive sales culture. While the ‘tone from the top’ is more positive, it says, many outside observers are sceptical that that tone has trickled down to brand level. Indeed, there was concern about ‘the message getting lost in the middle’ and some staff reporting the pressure to sell products persisted in subtler forms.

While the report acknowledges that banks are trying to change and have implemented top-down culture change initiatives and that performance frameworks have significantly altered, it says there is still a long way to go.

Professor Andre Spicer (Cass Business School), the report’s main author said: “A few years ago, it became clear Britain’s banks were broken. A toxic sales culture had taken hold and public trust was at an all-time low. We wanted to find out how they were being repaired. We found that some progress has been made. Regulation has improved, and big banks have all implemented new programmes to improve their cultures.

“Most people we spoke to told us that real change will take at least five years. There was some uncertainty as to how these changes were being translated into good practice at the customer coal face. Many culture change initiatives are fragile, and their success is not ensured. It’s clear that much work still needs to be done.”

Justin Welby Archbishop of Canterbury (New City Agenda Advisory Board Member) said: “It is clear that much more needs to be done by all stakeholders for trust to be restored in our financial institutions, and this report sets out clearly how banks are trying to do this and where improvements clearly still need to be made.”