More than 10 years have passed since the financial crisis of 2008, which had enormous repercussions for people’s welfare and the economic stability of many countries. There have since been major developments, many of them in the area of financial regulation.
Regulation and the sanctions of the law have an important part to play in responding to such catastrophic events.
However, law and regulation alone cannot restore trust in banking. In fact, as the leading philosopher Onora O’Neill suggested at the start of the Banking Standards Board’s (BSB) journey back in 2015, the focus of our work should not be on “restoring trust in banking”, but on helping the sector to become once again worthy of trust – a somewhat different idea.
This focus on earning trust, not expecting it, is becoming more widely accepted in banking and beyond. I welcomed Christine Lagarde’s comments on this in City A.M. last month.
More than 72,000 people working in banking across the UK responded to the BSB’s latest industry-wide survey to give us their unvarnished views on the culture of their firms. This in itself shows the commitment of many in the banking industry to becoming more trustworthy.
We also held many focus groups to explore specific issues, and spoke individually with a large number of senior executives and board members.
Getting the honest, anonymous views of employees on the culture of their firms, benchmarked across the industry, gives banks and executives a starting point to have a frank dialogue about how they can improve.
One area where we did see improvement last year was in perceptions of senior leaders in banking, who are starting to be seen to be taking more responsibility and being more credible. Of course, this result is consistent with – and no doubt reflects – the considerable regulatory focus on responsibility and leadership in recent years.
However, the industry’s progress overall in 2018 was somewhat uneven – gains from 2017 were maintained, but not extended. Three areas where further, deeper work is clearly needed are: speaking up and listening, health and wellbeing, and promoting equality of opportunity.
Of those employees who said in 2018 that they wanted to raise a concern about something at work, 63 per cent said that they had done so during the past year. However, 40 per cent of those who spoke up said that they had not felt listened to or taken seriously, and a further 19 per cent were unsure.
This highlights the importance of how firms listen and respond; if leaders want to encourage employees to speak up, they need to demonstrate at all levels that they are actually listening by acting on employees’ concerns.
Also, what employees feel able to speak up about is affected by how they are – and how they see others – treated when they do speak up. Individuals are more likely to challenge organisational issues than they are to speak up about personal concerns such as bullying, discrimination, and harassment.
Meanwhile, a quarter of all employees said that working at their firm has had a negative impact on their health and wellbeing – a number that has barely changed in the three years that we have been running our survey.
Firms need to take this lack of progress seriously. Simply having a wellbeing programme is clearly not enough; more needs to be done to identify and address the underlying causes behind these numbers.
Finally, leaders in the banking industry need to take greater personal responsibility for encouraging women to progress. The results showed that perceptions of equality between men and women are strongly influenced by leadership – or failure to exercise leadership – in this area.
This is particularly important in investment banking, where perceptions of inequality among women surveyed were the most marked, with 24 per cent saying that men had greater opportunities in their firm, compared with 14 per cent of women in commercial banking and functions, and 10 per cent in retail banking.
Overall, these results are telling us that making significant changes to the operations of large or well-established businesses is a long hard slog, and that many of our members are in the toughest yards of improving their culture.
For the banks, making themselves worthy of being trusted is a long-term job. But the very fact of the existence of the BSB, and the willingness of many firms in our industry – large and small, old and new – to participate and be self-critical, is an important measure of commitment to this job.