WHILE banking is a highly regulated industry, is it a profession? Unlike doctors, lawyers and accountants, bankers don’t have mandatory training – and for the most part you don’t need any specific qualification to work for a bank.
But it is also a very diverse activity and, unlike most professions, lacks a common core of knowledge: an FX trader in a big international bank will have very different skills to a portfolio manager in a small British private bank, who will have very different skills to a general counsel in a mid-tier retail bank. In their complexity and diversity, banks have more in common with other major FTSE 100 companies than, say, a law firm.
Despite this, there is increasing impetus for the creation of a unified professional body in banking. Many have noted that someone can rise to the top of a bank without having a single banking qualification.
And last week, the Parliamentary Commission on Banking Standards (PCBS) called for a strengthened regulator and a move to further individual responsibility. Central to this would be a radical shake up of the Approved Persons Regime and a rewriting of the regulatory Statement of Principles in a way that sets out to bankers how they are expected to behave. Placing the regulator centre stage in the drawing up of the principles is a good starting point for addressing the concern that codes are not particularly meaningful if they are just bits of paper that people tick.
Alongside this, the PCBS called for an industry-funded unified professional body that banks would sign up to. This would espouse higher professional standards (but would not be able to strike people off from working in the industry – that power would stay with the regulator). The Commission said that such a body should be independent of banks, but warned it would take a generation to implement. If it is done right, such a professional body could be a major force for cultural change in the industry. Lord Turnbull, a former cabinet secretary and a Commission member, suggested this week that the new professional body could be the conduit through which good principles are more than just fine words but embedded throughout the industry.
The propagation of higher professional standards would come partly from training and continuing professional development, although the Commission said that any new industry-funded professional body should not be a monopolistic provider of training. Rather, the body would help shape the curricula, examinations, and accreditation processes for qualifications for bankers in all roles and at all levels.
We are keen to play our part in raising standards in the industry. But as we set out in our evidence to the PCBS, we recognise that any professional body – even an industry-funded one – must be independent. The people who set, monitor and uphold professional and ethical standards should be separate from those who represent their interests to the government and media.
There has been a wholesale change in the attitude of senior management towards a more responsible banking. A professional body could help embed this new tone across the industry. There is great interest among bankers in professionalising their industry – and it is an issue we are discussing with our members.
Anthony Browne is chief executive of the British Bankers’ Association.