CHARTERED June/July 2017 BANKER The magazine for the UK banking profession
ENSURING ANONYMITY Institute whistleblowing initiative
BUILDING MOMENTUM The drive for diversity
DIGITAL DISCONNECT Is money losing value?
SAFE TO SPEAK UP BANKS SUPPORT WHISTLEBLOWING CULTURE
PROTECTING PEOPLE
UNDER PRESSURE ONUS ON FIRMS BUILD CONFIDENCE TIME TO TALK Are1 rules enough? Process with purpose Communication is key A new model
Chartered Banker Institute Drumsheugh House 38b Drumsheugh Gardens Edinburgh EH3 7SW tel: 0131 473 7777 fax: 0131 473 7788 THE FRONT LINE www.charteredbanker.com [email protected]
Chartered Banker Institute (London Office) Suite 208 1 Royal Exchange Avenue London EC3V 3LT tel: 020 7464 4440 Speaking up Chartered Banker magazine is published six times a year in February, April, June, August, October Confidentiality and sensitivity are and December on behalf of the Chartered Banker Institute. essential professional qualities, but
Subscriptions Chartered Bankers must also be able Chartered Banker is sent free to Institute members. For non-member to identify when disclosure might be subscriptions, contact the Institute on 0131 473 7777. appropriate, says SIMON THOMPSON. Simon Thompson, Editor in Chief Simon Thompson Chief Executive he Chartered Banker Code of Professional Conduct Deputy Editor in Chief requires members to treat information with appropriate Martin Fishman confidentiality and sensitivity. But, because the Code Publishers also asks members to act with integrity, lead by Editions Financial example, display high standards of professionalism and Managing Editor demonstrate a commitment to ethical conduct and the Layna Marshall Tpublic interest, this will not always align with the “traditional” view 0131 476 7608 of banking secrecy that implied no disclosure at all. [email protected] There are circumstances in which disclosure might be appropriate, Deputy Managing Editor indeed required – particularly (setting legal duties of disclosure aside) Amanda Fisher when a member becomes aware that “something is wrong” and 0131 550 1163 internal channels of communication are not able to set this right. [email protected] Chartered Bankers, in my view, have a professional duty to “speak Design: Katie White up” internally and, if required, to “blow the whistle” where they see unethical and unprofessional conduct by colleagues or by their Writers: Alexa Robertson, Jamie Graham, Helen King, Ian Henderson, Bob Souster institution. In fact I’d argue this is one of the fundamental aspects of being a professional – a loyalty to professional code and ethos that Advertising: goes beyond loyalty to colleagues and employers – coupled with an Tony Dickson 0131 476 2502 acceptance that, in turn, and despite many more protections now in [email protected] place for whistleblowers, doing the right thing may at present still prove to be a career-damaging move. The Institute, therefore, as the professional body overseeing the Chartered Banker Code, has a duty to “One of the fundamental support our members. As reported in aspects of being a this issue of Chartered Banker we are professional is a loyalty launching an anonymous whistleblowing membership service to professional code and Mission Hall 1 Roxburgh Place which I hope members will use ethos that goes beyond Edinburgh EH8 9SU alongside the formal reporting loyalty to colleagues tel: 0131 476 2502 mechanisms provided by banks and fax: 0131 476 2672 and employers.” regulators. Over time, we might seek to 10 Little Portland Street extend this further, and I’d welcome London W1W 7JG your feedback and views on this. tel: 020 3170 6277 This is a good example of how the Institute’s role and remit has www.editionsfinancial.co.uk grown in recent years, as well as our size and scale. With more than 30,000 members we are widely recognised as the professional body for UK bankers, leading the re-professionalisation of banking. This has led Council to conclude that the time is right to seek a revised Royal Charter to formalise our status as the Chartered Banker Institute. This will also modernise our governance arrangements to ensure they are fit for purpose for the larger and more complex organisation we have become, as well as to enable the voice of our wider membership to be heard. I hope you will support these changes and look forward to seeing you at our AGM on 15 June, where these will be presented for members’ approval.
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www.charteredbanker.com June/July 2017 3 The Professionals in this issue CONTENTS
JULIE MORRIS is a Senior Employment Lawyer at Slater and Gordon. She has over 17 years’ experience in employment law, including “Do you want to hear about of discrimination and whistleblowing cases involving senior executives and individuals. p14 wrongdoing via the media or do
DAVID LEWIS is Professor of you want to hear it from a line Employment Law at Middlesex manager who’s passed it up?” p17 University, London, where he is Head of the Whistleblowing Research Unit. He is also Convener of the International Whistleblowing Research Network. p17 Special report HEATHER MELVILLE is Chair of the Chartered Management Institute and Lead of CMI Women as well as Director, Strategic Partnerships, and Founding Chair of the RBS Focused Women’s Network. p23
MARJORIE STRACHAN is NatWest Global Head of Inclusion and has over 25 years’ experience of working in personnel, change and organisational development roles, predominantly in financial services. p26
STUART HAIRE is Head of Retail, UK, at HSBC and brings a strong background in enhancing customer experience through organisational change in roles at both established and challenger banks. p26
NIRO SIVANATHAN is Associate Professor of Organisational Behaviour at London Business School and a specialist in the psychology of the self, including how this influences decision-making. p28
CLAUDIA HAMMOND is the author of Mind over Money: the psychology of money and SAFE TO how to use it better and the presenter of All in the Mind on BBC Radio 4. p28 SPEAK UP 13-20 NEIL TOMLINSON is Head of Banking at Deloitte. A former senior executive of NatWest, 14 17 19 he specialises in strategy and Testing the rules Culture of A problem shared business transformation, with expertise across the banking sector. p30 Does current legislation protection Introducing the Institute’s do enough to protect Firms offer assurance through new whistleblowing PAUL HORLOCK is Head of whistleblowers? focus on internal procedures. membership service. Payments at Nationwide Building Society. He is responsible for the delivery of a full range of end-to-end payments service requirements for the Society and its 15 million members. p30 Chartered Banker to contents
4 Chartered Banker The voice of financial professionalism June/July 2017
“By accessing the accounts and data An audio recording of this issue’s special report they hold elsewhere, we can help is available to download from the podcast section personal banking customers with of the Institute’s website at http://www.charteredbanker.com/ complex financial lives.” p30 knowledgehub/podcasts/
REGULARS 22 Building momentum The Women in Finance charter is part of 03 The Front Line a much wider generational shift. Bankers must know when professional loyalty comes 26 The power of choice first, says SIMON THOMPSON. Is there a need to define gender when providing financial services? 06 People and numbers The latest news and moves in 28 Is digital driving debt? the UK banking industry. How new payments methods are changing our relationship with money. 10 Institute agenda What’s happening at the 30 Unlock the door to data Chartered Banker Institute. The customer impact of Open Banking – 46 Engaging the customer and opportunities for banks. Unlocking the potential of 33 Recognising talent stocks and shares ISAs. The Institute celebrates recent academic 47 For the greater good prizewinners. 26 Must banks accept they Grow your network cannot satisfy everyone, asks 34 39 Raising the bar BOB SOUSTER. LinkedIn is more than just a way to stay in Young Banker Audience Award winner touch, explains TERESA ROBERTSON. LIAM GOVER reports on his BSB placement. 50 Why work should be play 37 The final countdown 40 Driving standards Firms may need to let go to Introducing this year’s Young Banker of the The highlights from the CB:PSB’s Progress unlock creativity, says IAN Year semi-finalists. Report 2017. HENDERSON. 43 Embedding cultural 22 change The Institute’s SHONA MATTHEWS on the FCA’s mission statement. 44 Looking backward, moving forward The past, present and future of retail payments.
ISSN: 1759-9520 Chartered Banker Institute is a trading name of The Chartered Institute of Bankers in Scotland: Charitable Body No SC013927.
All rights reserved. The contents of this publication reflect the personal views of the individual authors and do not necessarily reflect those of the Chartered Banker Institute. No liability attaches to the authors or to the Chartered Banker Institute for any reliance on any part of the publication. The articles contain views, not advice or professional recommendations. You should consult your own professional advisers if you are minded to follow up on anything that you have read in this publication. to contents
www.charteredbanker.com June/July 2017 5 PAGEA ROUND-UP HEADING OF NEWS AND DEVELOPMENTS IN BANKING AND FINANCIAL SERVICES
Viney moves HSBC appoints AIA boss HSBC Holdings plc has was primarily with Prudential plc. He was to Metro announced the the founder and Chief Executive of appointment of Mark Prudential Corporation Asia Limited (1994 Metro Bank has Tucker as a Director and to 2003) and was on the board of appointed Alec Viney Group Chairman Prudential plc for 10 years, serving as its as Commercial Designate from 1 Group Chief Executive from 2005 to 2009. Banking Director. TUCKER September 2017. Tucker As a non-executive director, Mr Tucker Viney will join the will also take over as Non-Executive Group served on the Court of the Bank of bank’s specialist Large Chairman on 1 October. England from June 2009 to May 2012, VINEY Commercial Banking Tucker is currently Group Chief Executive where he was a member of both its team to look after business customers and President of AIA Group Limited (AIA), Financial Stability and Audit and Risk in the south-east of England. which he joined in July 2010. Since he led its Committees. Since 2012 to the present, He brings over 25 years’ experience successful IPO in October 2010, AIA has he has been an independent Non- to the role, having worked most become the world’s largest independent Executive Director of the Goldman Sachs recently as Commercial Relationship public-listed pan-Asian life insurance group. group. He will stand down from that role Director at HSBC. Viney will report Before joining the group, Tucker’s career before joining the Board of HSBC. directly to Andy Veares, Director of Large Commercial Banking. Commenting on his appointment, Viney said: “Having learnt about the bank’s vision and commitment Sajed steps down to customer service, I knew this was a Amer Sajed, CEO of Commenting on his decision, Amer Sajed place where I wanted to work. The Barclaycard International, is said: “After 10 incredible years at Barclays, business is witnessing significant to retire from his role in and decades in the financial services and sustained growth and I’m really July 2017. He will step industry, I have decided to retire and pursue excited to join the team and make down from his position on a new passion. I am proud to have been part a real difference to the way the Group Executive of nearly doubling the number of customers businesses bank.” SAJED Committee simultaneously. of Barclaycard and quadrupling our profits in Andy Veares said: “I am delighted “Amer has made a huge contribution to my decade at the bank, but I shall always be to welcome Alec to the growing team. the growth and development of Barclaycard proudest of the amazing people I have He brings a wealth of experience and during his ten years with Barclays, the last worked with here who have made our a real desire to do the right thing for two of which have seen him lead that business the best and most innovative credit the customer.” business globally,” said Jes Staley, Group card company in the world. I wish them even Chief Executive. more success for the future.”
Back to (cyber) basics Half of British businesses have discovered at Network, she cited Verizon research least one cybersecurity breach or attack in showing that 10 vulnerabilities accounted the past year, with firms holding personal for 85% of successful breaches. and financial data on customers more likely The vast majority of vulnerabilities to be targeted. exploited in these attacks were well known – The 2017 report, commissioned by the and had fixes available at the time of the Department for Culture, Media and Sport, event. In some cases, a fix had been available found that 46% of all businesses discovered at for over a decade. Rigorous patch least one cybersecurity breach in 2016, with management is key, she stressed: “Tools to the average cost to firms ranging between enable effective management of £1,570 and £19,600. vulnerabilities are well established, and yet But as the threat landscape continues to organisations either don’t use them, or don’t evolve, firms are leaving themselves use them effectively.” vulnerable by failing to get the basics right, Delfas also called for greater said the Financial Conduct Authority’s collaboration within the industry – and with Executive Director and Acting Chief government – to share intelligence and Operating Officer Nausicaa Delfas. Speaking grow the talent to keep us safe and secure at the Financial Information Security in the future.
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6 Chartered Banker The voice of financial professionalism Beato joins TSB
TSB Bank plc has appointed Paulina Beato as an independent Non- Executive Director. An experienced BEATO Board Director and Adviser with significant international expertise across a range of different industries and governmental agencies, Beato was deeply involved in the privatisation and restructuring of the utilities sector in Spain. She is passionate about competition and has been very active within financial regulation. Will Samuel, Chairman at TSB, All in the experience commented: “I am delighted to According to EY’s Global Consumer • Radically simplify the customer journey welcome Paulina to TSB. She will bring a Banking Survey, increasing commoditisation • Design and implement for end-to-end wealth of skills to our non-executive and new competition have shifted banks’ customer engagement – with effective team, including experience of audit, risk competitive arena from price, product and integration across channels and risk analytics, and extensive scale to customer experience. • Branch out into new service lines and knowledge of banking and banking Banks must be proactive in measuring product territories to enhance customer competition in Europe.” and enhancing the experiences that they relationships. “I have a passionate belief in the offer their different customer segments if For most, this does not mean starting benefits of competition for consumers they are to differentiate themselves from afresh; the survey found that traditional and the critical role that good regulation traditional competitors – and stay ahead banks are meeting most consumers’ primary delivers in this regard,” added Beato. of new ones, it said. financial services needs and, in many cases, “The values of TSB strongly echo my Taking a page out of FinTechs’ playbooks have a strong digital foundation to build own. I’m excited to join TSB to learn is the clearest way forward, according to EY. from. New entrants who offer a more more about UK banking and to To keep up with the new entrants convenient, personalised experience may support TSB in its role as the UK’s transforming customer expectations of prove the greatest threat to consumer trust challenger bank.” financial providers, traditional banks must: and loyalty.
Facts&Figures UK Finance names CEO Ex-Santander executive Stephen Jones has been appointed as CEO of a 68% new trade association formed by the merger of six UK trade bodies. The British Bankers’ Association (BBA), Council of Mortgage of customers feel “just a Lenders, Payments UK, Asset Based Finance Association, UK Cards number” to their bank. Association and Financial Fraud Action UK will legally merge as UK Finance in July. JONES Jones, who has stepped down as Senior Adviser to US private equity Half group Cerberus, is expected to start work at UK Finance prior to its creation on 3 July. of businesses have discovered a Current BBA Chief Anthony Browne, who will soon have completed the five years he breach or attack in the past year. agreed to hold the position for, is to step down prior to the merger. Commenting on Browne’s departure, BBA Chair Noreen Doyle said: “He has enhanced the reputation of the BBA, helping ensure it truly represents the full spectrum of the industry, and has helped ensure banks are more customer-focused. Nine in ten “He has played a fundamental role in the wake of last year’s referendum, being at people still use in-branch the heart of the industry’s Brexit deliberations. He has been an energetic force for good counter services. in banking, and will be missed by all.”
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www.charteredbanker.com June/July 2017 7 PAGE HEADING
Post Two-thirds feel Office ‘just a number’ banking The Current Account Switch Service has processed over 3.7 million successful switches since its launch in 2013. Giving people access to basic account The new Post Office deal, agreed in During the year from 1 April 2016 to management services via the Post Office may January 2017, extends the limited services 31 March 2017, 949,047 switches were mitigate the effect of branch closures, but that it has offered to some personal and completed, with over 25% of those in banks must be wary of the impact on their business banking customers for years – the first quarter of 2017. Awareness of relationship with customers, warns research now allowing 99% of personal banking the Bacs-run service also reached a new company Mintel. After all, 90% of people customers to conduct basic day-to-day record high of 79% in March – an use in-branch counter services offered by account management. increase of 21% since launch. their main current account provider, it reported. But with only 11% stating that their And separate research And while some banks are transforming preferred method of checking their balance commissioned by GMC Software and their branches instead of terminating them, is by visiting a branch, and 74% saying they Sainsbury’s Bank suggests switching is such as the Capital One Cafés, more than prefer online or mobile banking, the services only set to continue. The former, 1,000 have closed in the last two years. As offered are likely to be limited for the majority conducted by Kantar TNS, revealed well as losing the chance to showcase their of people. Instead, the importance of that 43% of banking customers were face-to-face customer service, banks may find branches comes into play for complex issues either thinking of switching banks in themselves at a disadvantage in identifying such as applying for a new product, closing an the next year, or had already potential cross-selling opportunities. account or making a complaint, said Mintel. committed to doing so.
RNIB approves accessible cards Two new cards from RBS have become the three vertical braille markings to indicate first products to receive approval from the whether it is a savings or debit card, as well Royal National Institute of Blind People as larger telephone numbers on the rear. (RNIB) in the form of its new quality RNIB Approved was launched in assurance mark, ‘RNIB Approved’. The response to demand from individuals Customer service concerns were cards, which aim to make everyday affected by sight loss, as well as from found to be a major factor in the banking easier for customers with sight businesses focused on providing accessible decision. Some 68% reported that loss, are available from both Natwest and products and services. To receive the new they felt they were “just a number” to RBS and were developed in partnership status, products must undergo a rigorous their bank, while 79% were concerned with RNIB. Accessibility features testing process and be reviewed by that customer service would fall as include a notch on the side to show both accessibility experts and a panel remote banking continues to grow. which way round it is and two or of blind and partially sighted people. Sainsbury’s Bank found that 7.2 million people feel the financial value of rewards received from their credit cards has fallen, compared to New Santander CRO 1.8 million who think they have Patricia Halliday has joined Santander UK plc as Chief Risk Officer (CRO). Halliday, who increased. The corresponding figures started her new role on 15 May 2017, reports to Chief Executive Officer Nathan Bostock. for bank accounts are 11.4 million and She now oversees Santander UK’s risk function with responsibility for the management and 2.8 million. As a result, 11% plan to control of all financial risks (credit, market, liquidity, capital and pensions) as well as the switch their bank account over the operational risk framework and reporting. next year and 9% intend to change Halliday has held senior credit risk positions at Deutsche Bank their credit card. and Barclays Capital. She joined Santander from GE, where she And, with Open Banking poised was CRO of GE Capital International Holdings, with oversight of to shake up the ways in which all enterprise risks across over $125bn of assets and multiple jurisdictions. consumers communicate with their She replaces Keiran Foad, who has been appointed Deputy Head of the risk division and bank – as well as what they expect Deputy CRO at Banco Santander. of them – many institutions will find Bostock commented: “I am delighted to appoint Patricia as our new Chief Risk Officer. they have to rethink their offering She brings extensive banking experience to this very important role.” to retain customers.
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8 Chartered Banker The voice of financial professionalism e-CPD Toolkit
An online learning experience which lets you choose the The e-CPD Toolkit is part of a wide variety of CPD method, subject and the type of learning that matches The e-CPD Toolkitresources is part available of a wide to supportvariety ofmembers. CPD resources To find availableout your needs. to support members.more about To CPDfind andout membershipmore about ofCPD the andInstitute, membership of email:the Institute, [email protected] Email: [email protected] Learn at your own pace and access your e-CPD Toolkit on the go, on any device, 24/7. To get started login to the members’ area of our website and visit My CPD.
www.charteredbanker.com
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www.charteredbanker.com June/July 2017 9 INSTITUTEAGENDA
Raising education standards worldwide During the recent World Conference of Banking Institutes in Nigeria, Simon Thompson, CEO, Chartered Banker Simon Thompson, Chief Executive Institute, was elected as Chair of the new Global Standards Education Committee. The Committee will seek to develop global education standards for A global forum banking institutes worldwide. Comprising representatives from Australia, the Bahamas, Canada, In April 2017, the Chartered Institute of fertilisation of ideas and networking for India, Hong Kong, Malaysia and Bankers of Nigeria (CIBN) hosted the World value; promote investment and economic Nigeria, the Committee will initially Conference of Banking Institutes (WCBI) in growth, especially in the industry; enrich focus on identifying existing good Lagos, Nigeria. access to information, knowledge experience practice and standards. It is then The WCBI is a biennial global forum that and expertise of professionals from other expected to build on these examples brings together around 1,000 financial jurisdictions; and provide a unique platform to develop an initial global education services professionals and other stakeholders for bilateral relations. standard (or standards), most likely engaged in banking operations. It serves as Professor Ted Gardener, Programme developing a standard setting out a platform for banking institutes to Director of the Chartered Banker MBA, was the knowledge, skills and behaviours strategically appraise the global challenges the Forum Chair for the Re-professionalising expected of professional bankers facing the sector. Banking through Continuous Education worldwide. The Institute will also This 22nd edition of the Conference session with colleague Professor John provide secretariat services to the aimed to promote innovative talent Ashton, Academic Director of the Chartered new Committee. management strategies for financial services; Banker MBA, as one of the guest speakers encourage strategic learning, cross- within this forum.
Maintaining standards As members of the Chartered Banker in banking. To check that members are the removal of their professional Institute, the only professional banking undertaking appropriate activities to designation until records could be institute in the UK and the only body in maintain their professional skills, conduct adequately submitted. the world able to confer the status of and knowledge, we sample the individual The Institute’s wide range of Chartered Banker, individuals have a CPD records of 5% of our membership on CPD resources can be accessed by responsibility to undertake and record an annual basis. all members in the login area at evidence of their Continuing Professional The latest CPD Sampling Exercise www.charteredbanker.com. Material Development (CPD) activities each year. reviewed 210 members’ records from is regularly updated to support Ensuring that members maintain and 2016. Of these, 151 were successfully members working in an ever-changing demonstrate this professional competence verified, while 33 were excluded from environment, and currently includes the is an important part of the Institute’s the sampling for personal reasons. A e-CPD toolkit for leadership, management commitment to embedding and sustaining further 26 did not provide evidence of and personal development plus access professional standards and restoring trust their CPD log when requested, resulting in to webinars and events.
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10 Chartered Banker The voice of financial professionalism CPD survey – thank you The Institute would like to thank members who participated in our recent CPD survey – we received a tremendous response. Results from the survey will inform the development of new resources and make enhancements to existing ones. They will also help us to improve the way we communicate with members about CPD resources. Congratulations to survey participant Zakir Mirza who was the lucky winner of a Upcoming voucher in our prize draw. webcasts Don’t miss the next events in our popular webcast series: HARD FACTS ABOUT YOUR SOFT Taking security SKILLS: WHY PEOPLE WITH PURPOSE PERFORM BETTER, WEDNESDAY 21 JUNE 2017, MANCHESTER THURSDAY 22 JUNE, 1PM-2PM If you missed ‘Taking Security’ when it took The latest in the seminar series Leaders who put relationships and place in London at the end of May, you can designed specifically for banking purpose before results enable still attend the Manchester session. The professionals and hosted by Shoosmiths employees to perform better. Why? event, a joint venture from Shoosmiths LLP and the Institute, will be held in Because having a sense of purpose and the Chartered Banker Institute, will Manchester on Wednesday 21 June. and belonging, and being respected, review the most effective forms of security makes you feel worthy and changes being used in the UK currently, effective Further details are available at www. your brain chemistry. That in turn clauses and trends to watch out for. charteredbanker.com/events-calendar/ influences everything from your perception of pain and your ability to handle challenging environments to your health and well-being. Best-selling author Kevin Murray discusses the essential soft skills which, in a competitive world, have become crucial to ensuring ethical behaviours, achieving high levels of customer satisfaction, and meeting demanding goals.
MINDSET OF SUCCESS, TUESDAY 4 JULY, 1PM-2PM What differentiates the very best leaders from the merely very good – and, more importantly, how can you build a mindset for success yourself? In this webinar, best-selling author, keynote speaker and social entrepreneur Jo Owen explores seven mindsets (plus one mindset from the dark side) which all the best leaders have.
From spies to sports, education to entrepreneurs, business and beyond, Mindset of Success is based on original research with ordinary Subscription reminder people doing extraordinary things. Don’t forget to renew your membership rolling membership year, so renewals will fall to maintain eligibility to use the 12 months after initial enrolment. The Register today at designatory letters appropriate to your subscription can be paid annually either www.charteredbanker.com > grade, or to continue with your studies. by direct debit, via the members’ section of Events Calendar or visit our July is the most popular month for the website or by cheque. If paying by direct Knowledge Hub to listen to renewals – and is also when changes in debit, members also have the option to pay recordings of any of our webcasts subscription rates occur – but we operate a their subscription in monthly instalments. that have already taken place.
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www.charteredbanker.com June/July 2017 11 Don’t interrupt.
It isn’t working. Financial services companies spent over a billion pounds on advertising and direct mail last year, but they still ranked bottom The Content of the ‘trust’ league with their audience. There is a better way. A Content Marketing Marketing manifesto strategy allows you to build a meaningful, Five rules for stress-free Content Marketing trustful relationship which your audience will actually value. People don’t like to be interrupted, but talk to them the right way and they are often happy to ENGAGE. #
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REQUESTCOPY YOUR NOW
Editions Financial is the UK’s only Content Marketing agency dedicated to fi nance. READY TO ENGAGE?
● Got 60 seconds? Sign up to our newsletter ● Got 5 minutes? Request our Content Marketing manifesto ● Got 30 minutes? Invite us in for a content strategy presentation to outline our approach Call Tony Dickson on 020 3170 6277 tony@editionsfi nancial.co.uk www.editionsfi nancial.co.uk
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12 Chartered Banker The voice of financial professionalism
345.1 Editions Banker 07.12 AW.indd 1 25/07/2012 16:06 Special report SAFE TO Don’t interrupt. SPEAK UP It isn’t working. Whistleblowing guidance from the Financial Conduct Authority (FCA) encourages Financial services companies spent over firms to implement internal procedures that allow employees to raise concerns about a billion pounds on advertising and direct wrongdoing and poor practice – and protect those reporting genuine problems. But mail last year, but they still ranked bottom The Content of the ‘trust’ league with their audience. recent events have prompted charities and law firms to call for greater protection for those flagging up internal problems – and even a reassessment of existing rules. In this There is a better way. A Content Marketing Marketing manifesto issue, ALEXA ROBERTSON asks: is the industry doing enough to support whistleblowers? strategy allows you to build a meaningful, Five rules for stress-free Content Marketing trustful relationship which your audience will actually value. People don’t like to be interrupted, but talk to them the right way and they are often happy to ENGAGE. #
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REQUESTCOPY YOUR NOW
Editions Financial is the UK’s only Content Marketing agency dedicated to fi nance. READY TO ENGAGE? 14 17 19 ● Got 60 seconds? Sign up to our newsletter Testing the rules Culture of protection A problem shared ● Got 5 minutes? Request our Content Marketing manifesto ● Got 30 minutes? Invite us in for a content strategy The new FCA rules may have led The onus is on firms to ensure their The Institute’s new whistleblowing presentation to outline our approach to a surge in the development of internal reporting procedures are fit support service uses pioneering internal guidelines. But does current for purpose. What does that mean, problem-sharing technology that Call Tony Dickson on 020 3170 6277 legislation do enough to protect and how else can firms reassure turns the web on its head. those who make a disclosure? whistleblowers they’ll be protected? tony@editionsfi nancial.co.uk www.editionsfi nancial.co.uk
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www.charteredbanker.com June/July 2017 13
345.1 Editions Banker 07.12 AW.indd 1 25/07/2012 16:06 TESTING the rules New Financial Conduct Authority (FCA) rules, including the requirement for whistleblowing champions, may have led to a surge in the development of internal guidelines. But does current legislation do enough to protect those who make a disclosure?
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14 Chartered Banker The voice of financial professionalism Special report
t’s been nine months since the FCA’s updated ON THE RISE? guidance on whistleblowing came into effect in the Whistleblowing charity Public Concern at Work UK. The rules – calling for financial service providers advised on 130 cases involving individuals working in to review and update internal procedures in order the finance industry last year, compared to 98 in 2015 to better protect employees and change the and 102 in 2014. The number of complaints registered whistleblowing culture – were last month also with the FCA, however, dropped during the 2015/16 Iextended to British branches of foreign banks. financial year, bringing them into line with 2013/14 Under the new guidance, financial services firms findings, which could be attributed to more regulated by the FCA and Prudential Regulation whistleblowers seeking support outside of the FCA in Authority (PRA) must appoint a whistleblowing the first instance. champion – a senior figure trained in the appropriate A 2015 report by the charity revealed that half of and confidential handling of whistleblower issues. Their those who contacted it after blowing the whistle had role should also include the development and either been dismissed or put under pressure to resign, promotion of a culture of increased transparency, and it called the attitude towards whistleblowers in including giving potential whistleblowers the the industry “pernicious”. reassurance of protection. Public Concern at Work is not alone in its belief that Encouraging disclosures of wrongdoing or illegal the working environment in many financial services practice is essential for rebuilding trust in the industry, firms still discourages employees from speaking up if as well as reducing fraud and encouraging best they have concerns about possible wrongdoing. practice across the sector. But recent reports from “There has been a significant attempt to try to within the industry have led to new concerns that the change the culture following the financial crisis, and legislation does not go far enough in protecting that is very much what the FCA and PRA have tried to employees who may need to make a disclosure. do with the latest guidance,” says Julie Morris, Senior continues over >>
“WE ARE SEEING MORE WHISTLEBLOWERS COMING FORWARD, BUT I DON’T THINK THEY’RE NECESSARILY GETTING BETTER PROTECTION.”
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www.charteredbanker.com June/July 2017 15 Special report
continued >> Employment Lawyer at Slater and Gordon. “We are seeing more whistleblowers coming “THERE IS A CONCERN AMONG WHISTLEBLOWERS forward, but I don’t think they’re necessarily THAT IF THEY RAISE AN ISSUE, THEY WILL NO LONGER BE getting better protection. The whole point of the guidance and the introduction of SEEN AS A TEAM PLAYER.” whistleblowing champions is to ensure that the message comes down from the top and individuals feel confident that they can raise an issue without it impacting them personally. following proper accounting procedures.’ 2015/16, the fact that the number of cases “It’s plain from what’s happened in the You can then end up in significant battles reported to it dropped from the previous year industry recently that the culture hasn’t yet over whether what they disclosed is enough could be due to a lingering lack of incentives changed. I don’t think the legislation goes to gain whistleblower protection. This isn’t for individuals to come forward. far enough.” what it should be about.” Writing in a recent CIPD blog, Nick Hawkins, Employment Solicitor at Stewarts LOST IN LEGALESE A CULTURAL SHIFT Law, said: “It (the decrease) may be because One of the problems is the nature of the The FCA/PRA guidance on whistleblowing, the enormous scrutiny of financial services technicalities within the legislation, which says Morris, now goes much further than firms since the financial crisis has led to a often leave whistleblowers and their the legislation, leading to a disconnection significant improvement in practices and representatives embroiled in a legal debate which can cause issues further through the behaviours. Others would argue that there quite separate from the issue which was process. While firms’ internal procedures are still insufficient incentives and protections originally raised. make provisions for any staff member, client for individuals who may wish to report poor “In a lot of cases we see firms trying to or customer to raise concerns, behaviours. Or it could be that individuals defend a claim on the basis that the whistleblowing legislation protects much have reputational and career concerns about whistleblower didn’t disclose information narrower categories of individuals and blowing the whistle and becoming what they which, in their reasonable belief, showed complaints. might regard as the ‘bad egg’.” there was a breach of a legal obligation. And, while the FCA Morris agrees. “The culture in banks “When individuals blow the whistle they managed 1,014 means that individuals tend not don’t say ‘I believe you were breaching intelligence cases to blow the whistle Section X of this particular act.’ What they containing overtly – they are more likely to say is ‘I think what you information from prefer do it more were doing was dishonest,’ or ‘We weren’t whistleblowers in subtly,” she says. “There is a concern that if they raise an issue, they will no longer be seen as a team player. It’s hard for banks to change the culture to one where that isn’t seen as a bad thing.”
FOUNDATIONS OF SUCCESS It remains to be seen whether new guidance goes far enough to protect employees and address the cultural resistance to whistleblowing, particularly as the new regulatory rules are rolled out more widely across the industry. In the meantime, financial services firms must regularly review internal procedures in order to reduce the likelihood of – as Hawkins puts it – “time- consuming, reputation-damaging and expensive enforcement action”. And, rather than focusing on the number HOW DOES WHISTLEBLOWING DIFFER FROM A GRIEVANCE? of cases reported, the FCA says it is vital that employees know they are supported, and There is an important distinction between a whistleblowing case and a grievance. A the exact nature of that support. As outlined grievance is a matter of personal interest regarding an employee which has no impact on in its most recent annual report: “Our aim is the wider public. Whistleblowing procedures, meanwhile, relate to serious concerns that to ensure that those who prefer to report to may affect the public, including: an independent body know about our role • A criminal offence has been, is being, or is likely to be committed and that, if they do need to take the often • Suspected fraud difficult step of reporting on an employer, • Malpractice or ill treatment of a client. they and their information will be treated sensitively and professionally.”
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16 Chartered Banker The voice of financial professionalism Special report
Culture of PROTECTION While the PRA’s whistleblowing function is available to those unable to voice their concern in the workplace, the onus is on companies to ensure their internal reporting procedures are fit for purpose. What do appropriate procedures look like, and what else can firms do to assure their employees they’ll be protected?
histleblowing policy to implement appropriate whistleblowing buy-in from senior management. Procedures has been propelled procedures. “Even without legislation, must also allow staff access to the top. to the top of the UK having a whistleblowing policy and “Culture is number one. The legislation can financial services procedure is a matter of self-interest. It’s as give all kinds of rights, but if senior industry agenda. simple as that,” he says. management make it clear they’re not Now, organisations “Do you want to hear about wrongdoing interested in receiving concerns, it will make Ware turning the microscope on themselves in via the media or do you want to hear it from life difficult. If the people at the top are order to review and improve the pathways in a line manager who’s passed it up? An receptive, you will get more people reporting.” place for employees to make disclosures external disclosure is a failure. You want to Once procedures are in place, it is around poor business practice. deal with concerns internally. Even important that messages of assurance are While the Prudential Regulation Authority’s multinationals in countries where there are regularly reiterated to staff, particularly during (PRA) whistleblowing function aims to no legislative pressures have procedures times of change. Induction training around support financial services professionals with because it’s in their interest.” why it’s important to raise concerns, and concerns around wrongdoing in the regular reminders and encouragement around workplace, whistleblowing experts believe PROCEDURES WITH PURPOSE how to do so, are some ways the culture can strong internal procedures are vital in dealing While most banks would have undertaken continue to be challenged and improved. with any issues promptly. comprehensive consultation prior to “When you get a new senior member of Indeed, with or without legislation, implementing internal procedures, it is staff, it’s appropriate for them to say ‘My whistleblowing expert Professor David Lewis essential that the introduction of such believes it simply makes good business sense policies comes with a strong statement of continues over >>
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www.charteredbanker.com June/July 2017 17 Special report
continued >> door’s always open and I want to hear bad news as well as good news.’ That’s just good governance and is in everybody’s best interests. It has to be endemic within the organisation,” says Lewis.
COMMUNICATION IS KEY In the past, conversations around whistleblowing often had negative MODEL OF SUCCESS? associations. Now, with shifting cultural norms, empowering banks to encourage and The Dodd-Frank Act, introduced in the US in 2010, has been described by leading address concerns internally is reliant on whistleblowing attorney Michael Kohn as “the best whistleblower provisions developing and maintaining open lines of ever enacted anywhere”. The Act gives credible whistleblowers the right to a communication with staff. percentage of any funds recovered by the Securities Exchange Commission (SEC) Some organisations now use appraisals as as a result of the disclosure, and acts as protection for staff with limited an opportunity for employees to discuss any employment protection. Strengths of the US model include: concerns they may have – or simply enable • Provisions for total anonymity management to check whether individuals • Strong anti-retaliation legal protections • Financial rewards that encourage whistleblowers to come forward • Bars on non-disclosure agreements that restrict reports to the government or the right to obtain a reward “PRESS COVERAGE OFTEN • ‘Intelligently thought-out methodology’ allows compliance officers to pass RELATES TO CASES WHERE disclosures to government regulators and obtain a reward should the WHISTLEBLOWING HAS company fail to adequately address the issue within 120 days GONE WRONG. WITH • The enactment of the Dodd-Frank programme has already returned billions of INTERNAL REPORTING dollars to US taxpayers. PROCESSES IN FINANCIAL SERVICES, I SUSPECT THERE IS AN AWFUL LOT GOING RIGHT.” ROOM FOR REWARD? company and themselves. Indeed, I think a While the UK’s current guidelines aim to statutory reward scheme could be negative – encourage potential whistleblowers to come it implies that whistleblowers are motivated forward – and protect those who already by money rather than the desire to have the would be comfortable raising issues through have – some believe that a model based on wrongdoing rectified.” the adopted framework. financial incentives, akin to that adopted by PricewaterhouseCoopers, in its the US in 2010, could help bring wrongdoing BEHIND THE HEADLINES whistleblowing guidance ‘Striking the to the surface even more effectively. The tide for whistleblowing in the UK seems Balance’, also highlights the importance of Lewis disagrees, maintaining that the main to be turning. Whereas the phrase had mainly keeping whistleblowers updated on the reason such a model is required in the States is negative connotations in the media just a progress of complaints – an area which the absence of employee protection measures. decade ago, we now see neutral and often might previously have been neglected. “The US model has to be taken in positive news stories. And, while high-profile “In the past few years, we have observed context,” he says. “They don’t have strong cases can raise concerns across the industry, a recognition and an understanding that it’s trade unions, and in some sectors those who many organisations are clearly keeping the not just about having the rules, the policy, lose their job for being a whistleblower are benefits of an open and supportive the processes and controls in place. It’s really unlikely to be employed again. In theory, whistleblowing culture in their sights. around the culture and the transparency of employment protection means whistleblowers “As far as I’m concerned, the bottom line how things are dealt with,” it says. should not suffer like that. Through my is culture, not law and scandals,” Lewis “This is why it is important for managers contact with whistleblowers, I’ve found that adds. “A positive and open culture can be to keep whistleblowers updated on the most would be horrified if it was suggested to fostered, and within some organisations it’s progress of their complaint, as feedback them that they reported something because very well promoted. embeds trust. Where a particular event has there was a reward available. “Press coverage often relates to cases happened or an organisation has suffered a “They’re not interested in that. They where whistleblowing has gone wrong. crisis, leaders need to be seen to learn from suspect wrongdoing and want it With internal reporting processes in financial it. Learning from failure and crisis is another investigated, because they fear there is an services, I suspect there is an awful lot way to build trust within an organisation.” inefficiency that could harm both the going right.”
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18 Chartered Banker The voice of financial professionalism Special report
As the Chartered Banker Institute prepares to launch its new whistleblowing membership service, we report on the pioneering problem-sharing technology turning the web on its head. A PROBLEM shared...
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www.charteredbanker.com June/July 2017 19 Special report
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ouldn’t it be amazing This service just provides a framework and that if the user loses their case number they if people could say another resource to the wider membership would need to raise the case again. Not even anything?” This community if they feel they need to speak up.” the staff maintaining the site have access to any “W was the thought user information, says Chandler. that inspired IT specialist Neil Chandler REWIRING THE WEB to create his brainchild, the completely While the idea was straightforward, A STEP IN THE RIGHT DIRECTION anonymous self-expression website developing the technology behind Cathartic One of Cathartic’s key strengths is its ability Cathartic, three years ago. proved significantly more complicated. It to connect users with useful resources and Having spent almost two decades working involved, as Chandler explains, essentially relevant support providers such as highly for some of the world’s largest financial ‘un-building’ the internet. specialised charities. And, while the institutions, Chandler identified a need for a “I looked at the existing technology out whistleblowing service will be unable to platform which would allow people to share there and modified it to build an anonymous process disclosures, the platform will act as a their worries in a secure, non-judgemental platform, which meant building everything signpost to useful resources and provide and anonymous environment. from the ground up,” he says. “The internet guidance on next steps. “For most people, talking about their is based on tracing people. It inherently The Institute, which hopes to launch the problems is a way of offloading things that wants to know everything about you for new service this autumn, is now appealing have been niggling at them, whether it’s advertising purposes, so what I had to do for support from members of the finance something that’s happened in their lives, was reverse-engineer bits of technology community to take the initiative forward. something they’re going through personally, to ensure complete anonymity.” “It’s critical we get the right people to or work-related concerns,” says Chandler. This dismantling and painstaking support us in developing the framework and rolling out the initiative to our members. We’re looking to connect with Fellows or members the Institute who are perhaps “IF YOU WANT TO TALK ABOUT ANYTHING PROPERLY, retired from the profession, but have YOU HAVE TO BE TRULY ANONYMOUS. IF NO ONE experience in compliance, regulation or KNOWS WHO YOU ARE, YOU CAN SAY ANYTHING YOU LIKE.” human resources. This removes any conflict of interest. Training and guidance will be available to equip the volunteers. We’d also like support from anyone interested in “Talking is often the first step on the road rebuilding of technology led to the creation helping to develop the governance of the to recovery. After looking at it from a of a platform quite unlike any other, which whistleblowing framework.” technical perspective, I concluded that if you uses none of the traditional methods of While the challenge to bring want to talk about anything properly, you logging in and can’t even trace where a user whistleblowers out of the shadows is have to be truly anonymous. If no one knows accesses the site from. ongoing, innovative platforms such as this who you are, you can say anything you like.” A case number linked to each story is the are no doubt a step forward in giving them a only detail logged, but the site is so anonymous voice – and someone to hear it. NEW WAY TO SPEAK UP The technology has now been adapted as part of the Chartered Banker Institute’s new whistleblowing membership service, aimed at providing an alternative route for members to air professional concerns and receive signposting to support making disclosures. Joanne Murphy, the Institute’s Director of Operations, believes it is vital for banking professionals – and the wider industry – to have appropriate options available to report wrongdoing in the workplace. “The Institute is the industry’s professional body and, in our role in supporting the public interest, it’s really important to ensure that our members have somewhere they can go if they feel they want to discuss whether a professional ethical dilemma should be reported, or they feel they aren’t getting anywhere through traditional routes,” says Murphy. “It will also provide an alternative if employees feel for some reason that they can’t raise the issue internally. “Whistleblowing is so sensitive and can potentially mean the end of someone’s career, so it’s understandable that people are sometimes nervous about coming forward. Often the issue can be resolved relatively easily.
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20 Chartered Banker The voice of financial professionalism to contents THE DIVERSITY AGENDA
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22 Chartered Banker The voice of financial professionalism Building momentum In its first year, the Women in Finance charter has proved to be an important agent for change in a sector looking for measurable improvements on diversity and inclusion. The time for talk is now over, explains HELEN KING.
ast summer, a Chartered Banker in their workplaces for ten years, highlights They have daughters who are finishing magazine Special Report titled Jon Terry, PwC Global Financial Services HR tertiary education or wives who want to get ‘A Fairer Future’ explored the Consulting Leader. “But other areas such as back into work, and they want them to have implications of the newly launched asset and wealth management or insurance fair opportunities as their careers progress. Women in Finance charter, from firms are only now just beginning to look at These individuals have a very important role the business case for promoting this issue. These organisations do not yet to play in driving cultural change at the top Lwomen up the talent pipeline to how have the clear strategies and policies – and of these organisations.” unconscious biases can block gender parity. the HR processes to support them – in Women can also undermine themselves One year on, financial institutions have place.” For these firms, the charter is proving along the way, however, adds Melville, embraced the charter with such enthusiasm to be a great starting point, he says. because many still have an inner voice that that more than half of the sector’s employees Indeed, by translating the challenges into tells them they can’t have it all. “They doubt are now covered by its framework. easily intelligible business language, the charter they can take on the long hours required in But with some debate continuing about is keeping gender diversity at the heart of areas such as investment banking and have a the small print – particularly around targets boardroom conversations, Terry points out. family,” she says. “But women will continue being linked to executive pay, for instance – Once signed up to the charter, to have babies no matter what. And, while what progress has been made in the organisations must set and meet targets some organisations are working on this – I did charter’s inaugural year? which are linked to executive pay. This recently see one (though this wasn’t a means progress must also be monitored. financial services company) advertising that it A SECTOR IN TRANSFORMATION “When gender diversity policies are put in offers female employees an opportunity to Making the right noises, but not acting on place, firms have to continue to pay freeze their eggs – most have a better them, is no longer enough, says Heather attention to them,” he says. understanding of the challenges.” Melville, Chair of the Chartered This, he warns, is not a quick fix, however. The cost of childcare remains a deterrent Management Institute and Lead of CMI “This is a multi-generational challenge and for some mothers considering their return to Women. But, she stresses, the detail is actually less important than what the charter stands for – an active commitment to “BY TRANSLATING THE CHALLENGES INTO EASILY INTELLIGIBLE improving diversity in the workplace. BUSINESS LANGUAGE, THE CHARTER IS KEEPING GENDER “This charter is about transforming the banking industry, so it becomes more DIVERSITY AT THE HEART OF BOARDROOM CONVERSATIONS.” sustainable and trusted, and reconnects with the communities it serves,” she explains. “This is now about much more than must be followed up with cultural change at work, so providing a flexible working opportunities for women – it’s about values key decision-making moments – a policy environment which focuses on the needs of for people throughout these organisations.” doesn’t do that,” he says. both women and their partners means that childcare can then be shared. BEYOND THE BUSINESS CASE RESTORING THE BALANCE “Neither has to then sacrifice their career While there is no longer any doubt about Melville, who is also the Founding Chair of or miss out on spending time with their the business case for promoting diversity, the RBS Focused Women’s Network, expands children,” Artz points out. says Vivienne Artz – President of Women in on this concept, saying that the charter is Melville concurs: “Responsibility for Banking and Finance – delivering measurable just as much about men as it is about children is shifting and being shared results has been more difficult. women, despite its title. between both partners. This means younger “There has been plenty of ‘feel good’ According to PwC research, gender people – particularly men – are much more talk about best practice, but the charter is assumptions and stereotypes remain the most interested in working for an organisation the first initiative which has done more than significant barriers to hiring experienced which offers flexibility.” simply raise awareness,” she explains. “It women for 35% of male and 45% of female is the setting of targets which is making executives responsible for diversity. THE RISK OF INEQUALITY organisations examine this issue with a “Men still dominate at the helm of PwC research shows that if firms do not factual, critical eye.” financial services organisations; however, embrace diversity, talent will move to other Many banking institutions have been these are people who now know the working to improve diversity and inclusion importance of diversity in the workplace. continues over >>
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www.charteredbanker.com June/July 2017 23 THE DIVERSITY AGENDA
CHALLENGING THE MODEL
New entrants have a unique opportunity to build diversity and inclusion into their corporate DNA. So how have ‘challenger’ brands performed since the introduction of the Women in Finance charter?
CHALLENGER ONE: TSB As one of the first signatories to the Women in Finance charter, TSB has already hit the government’s target for 33% of board members to be female by 2030. “It is about sustainable, long-lasting gender inclusion in every part and at continued >> every level of the bank. In fact, with 40% female board members, we are already more flexible, progressive organisations – or is transparent about the challenges, and exceeding this target,” says Helen Rose, sectors. Again, men have an important role how she overcame them – including the TSB Chief Operating Officer and in driving change. men who have helped her on her way.” Executive Sponsor for Gender. A new generation of talent is now rising “We aspire to have between 45% and up the ranks with very different expectations TIME TO TALK 55% of all senior roles at TSB held by of corporate behaviour, says Artz. The Women in Finance charter is also an women, and have already grown the Organisations which show that diversity is at example of what can be achieved when proportion of senior female partner roles, the heart of their business will be seen as an there is good dialogue between industry and from 37% when we launched in 2013, to employer – and provider – of choice. government, in this case the Treasury, 41% today.” “Every initiative designed to help women according to Paul Chisnall, Executive Director Customers are changing, and a progress in their careers will actually benefit of Financial Policy & Operations at the British workforce should reflect this, Rose all employees. Returner programmes, for Bankers’ Association. believes. “Women are said to influence instance, not only help women retain “The charter works because it builds on 80% of buying decisions and, by 2025, confidence in their ability to do their job, pre-existing banking and finance initiatives they are expected to own 60% of all and do it well, but will do so for anyone who aimed at improving the pipeline into senior personal wealth,” she explains. has been off work for any reason, from management positions. It’s a prime example So, it is perhaps no coincidence that illness to study.” of how government and industry can TSB has received external recognition, Artz adds that an important strategy for co-operate and create a better vehicle such as making number nine in the businesses looking to retain female talent is for accelerating the pace of change. ‘Sunday Times 2017 Best Companies to to keep in contact with women who are “In the end,” Chisnall concludes, “it Work For’ list. away from the workplace while on maternity is not about gender; it is about achieving leave, so they remain part of the business a generational shift in career paths for all. CHALLENGER TWO: CLYDESDALE & community and are aware of changes to In Germany, you’ll see the focus is on social YORKSHIRE BANK (OWNED BY CYBG) both the organisation and the industry. mobility, while in other countries it is about CYBG has a range of diversity and Terry goes further, saying he is irritated ethnicity. Here in the UK, we have begun this inclusion initiatives but these continue when people blame women for inequality in important journey with Women in Finance.” to evolve, according to Kate Guthrie, the workplace. Group Human Resources Director, CYBG. “When women are given the tools they “This year, we are launching new need to be more effective in meetings, leadership standards that clearly expect challenge colleagues over pay or determine KEY TAKEAWAYS our leaders to be inclusive; we are how they return to work after maternity Women in Finance charter – one year on: also introducing a new set of values leave, the whole business benefits,” he says. • 122 organisations have voluntarily and behaviours with inclusion running “The real issue is that decisions are still, in signed up throughout, reinforced by a much the main, made by white, middle-aged men • Almost 50% of financial services staff more progressive performance – like myself – in the moments that matter.” in the UK are now covered management approach.” Melville similarly points out that men • Includes 30 banks, which is 80% of Guthrie says that organisations are have a vital role going forward in the banking marketplace, and now looking much more systematically strengthening the diversity agenda. represents 350,000 jobs in the UK at where the flow of female talent breaks “It is about giving women better • 77 financial services firms have down and addressing the issues. opportunities, but also engaging male leaders committed to having at least 30% of “One consequence of this is likely to become change agents – so they are part women in senior roles by 2021 to be more work around family-friendly of the journey with us,” she suggests. • 23 firms have policies and getting more balance in This includes telling the stories of key role committed parental leave. I would like to think models, she says. “Take Virgin Money CEO to a 50/50 that there will come a point in the Jayne-Anne Gadhia, for instance, who led gender split future when a charter like this isn’t the industry review. She has written an by 2021. needed because gender balance inspirational book which candidly describes simply becomes the norm.” her battle with postnatal depression. But she
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24 Chartered Banker The voice of financial professionalism to contents GENDER X THE POWER As HSBC joins other high street banks in introducing new gender-neutral titles for its customers,
he issue of gender neutrality in need for our customers to tell us their included with these changes,” he states. banking has been in the gender when they apply for online banking Lloyds recently announced that it is spotlight lately with a number facilities,” she states. looking to widen the number of prefixes of banks making changes to available as part of its inclusion policies. their processes when it comes PREFERRED PREFIX One bank that isn’t planning to add to to customers choosing how to The most widely used gender-neutral title is their choice of gender-neutral titles at the Tidentify themselves. ‘Mx’ which is also recognised by the UK moment is Metro Bank. “Our customers Gender neutrality means different government. The introduction of ‘Mx’ by don’t want us to make an assumption about things to different people but it’s important NatWest in 2014 and Metro Bank in 2016 in their gender. We have no immediate plans to make the distinction that it’s about addition to existing gender-neutral titles such to offer other gender-neutral titles, but how people identify in terms of gender as Dr and Professor has been widely we’ll monitor that based on listening to rather than it being confused with welcomed by LGBT and equality campaigners. feedback,” says Harmer. sexual preference. HSBC the company has introduced 10 The fact that there is now a choice for Many people in the UK identify as being gender-neutral titles. Stuart Haire, Head of people who identify as gender neutral is a gender neutral or non-binary, and don’t Retail, UK, explains more about the reasons consider themselves to be male or female. why. “We worked closely with the transgender Customers can now select from a range of community to ensure we reflected their different gender-neutral titles at the four needs and so that they are able choose major banks in the UK – Barclays, HSBC, the title that actually suits them. Lloyds and NatWest. These new services have been well received by our BANKING FOR ALL customers and we are Metro Bank is another organisation which has proud to be able to introduced a gender-neutral title for help our customers. Its decision was prompted when a transgender member of staff saw an interview with customers feel someone who was gender neutral and was supported and having difficulty opening a bank account using a non-binary title. They were being forced to select either ‘male’ or ‘female’. “OUR CUSTOMERS Metro Bank’s Chief People Officer, Danny DON’T WANT US TO Harmer, was determined to take action. MAKE AN ASSUMPTION “Everyone was on board internally as it’s ABOUT THEIR GENDER.” about doing the right thing for customers and colleagues and the company ethos of having ‘no stupid bank rules’,” she says. In the case of NatWest, it was about listening to feedback from focus groups. Marjorie Strachan, NatWest Head of Inclusion has taken a slightly different approach. “Focus groups led us to introducing ‘Mx’ and we’ve removed the
HSBC’S GENDER-NEUTRAL TITLES
• Mx, pronounced “Mix” or “Mux” • Ind, an abbreviation of individual • M, an abbreviation used in France • Misc, an abbreviation of miscellaneous • Mre, for “mystery” • Msr, a combination of Miss and Sir • Myr, used in other parts of the world • Pr, an abbreviation of person, pronounced “per” • Sai, pronounced “sigh”, used in Asia • Ser, pronounced “sair”, used in Latin America.
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26 Chartered Banker The voice of financial professionalism OF CHOICE JAMIE GRAHAM considers the importance of defining gender in access to financial services. positive step. “Individuals shouldn’t be forced she says. “If you look at the Stonewall people identifying as gender-neutral when to make a choice they don’t identify with.” Index and who the champions are, there they come into branches and how colleagues are a lot of big banks. We’re number 13 communicate with gender-neutral employees. INCLUSION MATTERS in the top 100.” Something as simple as using the right Banks have fared well in the most recent While there is still work to do on equality, pronouns when talking about a gender- Workplace Equality Index published by gender and LGBT issues across the industry, neutral customer or colleague can make a big Stonewall with Lloyds Banking Group being inclusion is clearly something that’s high on difference. For example, using ‘them’, ‘they’ named ‘Employer of the Year’ for 2017. The the agenda of many retail banks. Important and ‘theirs’ rather than ‘he’ or ‘she’, or simply Index showcases the best employers for initiatives in this area focus on colleagues as using the person’s name rather than a title, LGBT staff in the UK. well as customers to make sure everyone is will usually be more appropriate.” Marjorie Strachan, NatWest Head of made to feel accepted and welcome. Inclusion, feels the banking sector as a “Inclusion has become more mainstream,” IMPACT ON RISK whole is making an impact. “The big banks Strachan adds. “While it used to perhaps be Doing the right thing for customers by giving are relatively innovative in this space,” the role of the HR team, it’s now more about them a choice they’re comfortable with is a how we do good business.” positive step. But do gender-neutral titles have any impact on risk when considering BEYOND BOX TICKING applications for products such as credit cards There’s more to gender neutrality than and personal loans? providing customers with a box to tick. Implementing gender-neutral titles The way banks speak to customers involved discussions with the risk teams at and colleagues is also important. Metro Bank and NatWest. In the case of In the case of Metro Bank, this Metro Bank, Harmer was determined not to involved updating internal see regulation as a barrier to change. resources about how colleagues should speak to “IMPORTANT INITIATIVES FOCUS ON COLLEAGUES AS WELL AS CUSTOMERS TO MAKE SURE EVERYONE IS MADE TO FEEL ACCEPTED AND WELCOME.”
“The risk and regulation that surrounds banking probably limits innovation sometimes,” she says. “We try to think about the spirit of regulation and what the outcome should be. The majority of people identify as either male or female so someone’s sex is not a particularly secure way of keeping people’s money safe.” Taking a simpler approach to the bank’s risk appetite is high on the agenda at NatWest. Like Metro, NatWest recognises gender change isn’t necessarily a ‘red flag’ from a money-laundering perspective. “We no longer ask our customers to tell us their gender when they apply for online banking facilities,” says Strachan. “It’s within our risk appetite not to ask for that any longer because it never posed much risk in the first place.”
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www.charteredbanker.com June/July 2017 27 MONEY MATTERS
Is digital driving DEBT? Digital payments offer an easy alternative to cash, but they are causing a psychological disconnect between customers and their account balance. Do banks have a responsibility to ensure that money does not become an abstract concept?
n 2017, it is by no means unusual value that we attribute to physical cash, says to arrive at your desk on a Monday Claudia Hammond, psychology lecturer, morning without having opened award-winning broadcaster and author of your wallet; you might swipe your Mind over Money. contactless card to get the tube, take a pre-scheduled Uber ride and BEYOND FACE VALUE Ipick up a quick breakfast using Apple Pay. Our relationship with physical cash is a So far, so convenient. complex one, explains Hammond. “Our belief Cash does remain in regular use, but in the value of money – be it a piece of paper recent research from Mastercard noted or metal – is so deep-rooted that the shift towards electronic payments. neuroscientific studies have recorded activity More than two in five British people in the reward system of the brain when it is (44%) stated that they were ready to give given to individuals and also when it is up cash if card payments were accepted promised in the future.” While other offerings everywhere, the study found. This figure like chocolate or wine trigger activity when is highest among younger generations, presented, the notion of receiving them in the future does not trigger the “Paying digitally does distance us from the same response. value that we attribute to physical cash.” She also cites studies following people’s with 62% of 25-34-year-olds ready to supermarket shopping for a year, with half ditch cash and 53% of those in the paying by card and half by cash, which have 16-24 and 35-44 ranges. found that those who pay in cash spend less consumption from the pain of paying,” says Unsurprisingly, one of the primary than those using a card. Dr Niro Sivanathan, Associate Professor of motivations for the two out of five (41%) Organisational Behaviour at London Business who prefer cards to cash is the safety and THE PAIN OF PAYING School. “Paying with contactless and other security of simply being able to cancel a lost This is because, while counting out cash can seamless digital payment methods reduces or stolen card. But whatever the motivation, be psychologically painful, paying with credit the psychological friction by anaesthetising paying digitally does distance us from the “decouples the hedonistic pleasure of the pain that accompanies payment.
MONEY MANAGEMENT removes us from the cost of making a payment; it essentially gamifies the process Research commissioned by financial of consumption," says Sivanathan. technology firm Intelligent Environments Just as with adults, it is the behavioural found that 80% of parents introduced cues that make the difference. “It depends their children to digital money on the structure parents have put in management at a young age. It found that place,” Hammond agrees, “and whether 28% pay their children in digital currencies the child is free to click and pay, or must for use in gaming communities and 34% first gain permission.” transfer a weekly amount into their Unrestricted access to any kind of children’s digital banking accounts. pocket money at risk of failing to grasp the spending is likely to devalue the concept But are children who are growing up value of money? “Logically speaking, of money, whether digital or cash, with in-app purchases, Apple Pay and digital tapping or swiping to make a purchase concludes Sivanathan.
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28 Chartered Banker The voice of financial professionalism “Removing symbols or reminders of units of currency can increase our willingness to spend.”
you don’t even have to queue to continue drinking, it’s very easy,” says Hammond.
BEHAVIOURAL ‘NUDGES’ But physical health is not the only matter at stake. Banks must balance providing the quick and convenient payment methods that their customers now expect, with behavioural cues to help protect their financial wellbeing. In some instances, ‘decoupling’ may be helping companies to profit – to their customers’ financial detriment, Sivanathan points out. “In casinos, for example, one of the reasons that they provide chips rather than stacks of money is security, there’s no doubt about that. But we also know that it dulls our awareness of the real-world value that we are “Regardless of how sophisticated and engage cognitively with the process; you have risking.” Removing symbols or switched on people are, the scientific studies to mentally work out which combination of reminders of units of currency can consistently demonstrate an increase in coins or notes to hand over to reach the total, increase our willingness to spend, he says. spending as a result of the reduction in rather than just tapping a card.” This is where opportunities lie for banks psychological pain that accompanies This has a knock-on effect. “It may and FinTechs to harness the benefits of the purchases via credit cards.” sound obvious, but, when using contactless, Competition and Markets Authority’s Open While this may not prove problematic for a customer will probably be able to Banking final order and work together to what is inevitable spending during the daily deduce that a purchase they have made provide better ways for their customers to commute, Sivanathan’s research in the area, was under the £30 limit, but when tallying manage their money. “Text alerts can work conducted with co-author Nathan Pettit, up the day’s spending they are unlikely to well,” says Hammond, “but customers must goes on to suggest that this decoupling be as accurate as if they checked what proactively set them up, and they only cover increases the likelihood of unplanned remained of the £50 they withdrew earlier one account.” spending. And that includes a willingness to that day.” When you don’t have such Likewise, new apps allow customers to pay more for high-status, luxury goods and obvious markers, it follows that you may aggregate account data in one place, but the splashing out on non-essentials. not notice costs adding up, she says. security of providing login details to a third This becomes more of an overt ethical party is questionable – and the data they can LACK OF KEEPING TRACK quandary when you consider potential access is limited. Digital banking has become Research has also shown that, when asked to health issues, such as excessive drinking a linchpin of customer loyalty, and the advent recall the total of their shop, consumers who using contactless beer pumps. “If it is of Open Banking is the next big opportunity have paid using contactless are often unable necessary to walk down the street to the for institutions able to deliver sophisticated, to, says Hammond. “One of the reasons for nearest ATM to buy your next drink, you may trusted solutions that draw useful insight this is that paying with cash forces you to decide that it is time to call it a night, but if from past and present data.
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www.charteredbanker.com June/July 2017 29 OPEN BANKING
UNLOCK the door to DATA
Open Banking and PSD2 have been hailed as both a threat and an opportunity for retail banks, potentially levelling the playing field for new digital entrants. What does Open Banking mean for the average person? And how can incumbent banks make the most of this opportunity?
pen Banking is widely hailed as a powerful, positive and ultimately revolutionary development in the industry. Initiated by the Competition and Markets Authority O(CMA), the hope is that the development of an Open Banking ‘ecosystem’ in the UK will dramatically improve competition and innovation, to the benefit of personal and business banking customers. Personal and small business customers will be able to share their transaction data securely with other banks, and third parties, making it easier for them to compare products and switch to better deals based on their own financial circumstances. Eventually it might mean being able to manage their accounts without having to use a bank. Yet, nine out of 10 Britons have not heard TAKING BANKING TO A NEW LEVEL offer new, tailored propositions to help of Open Banking, according to research from The impact of Open Banking goes well customers control their finances, such as consumer and business insights expert beyond the CMA’s original order that focuses money management and budgeting tools,” Equifax. While they are the intended on competition and switching in the current notes Neil Tomlinson, Head of Banking at beneficiaries, the question remains – will they accounts market. The opening-up of Deloitte. trust it? And what does it mean for their customer transaction data means that “both “There is further potential for banks and relationship with their bank in future? banks and third parties may soon be able to third parties to offer personalised rewards
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30 Chartered Banker The voice of financial professionalism “With the customer fully in control of their own data and activity, they could port their transactional banking relationship to another provider without actually changing accounts. In effect, it creates the ability for a service provider to service an account without having to own that account. “A customer might choose to manage the current accounts they hold with various banks through a third-party service, giving it permission to access those current accounts via the API, view transaction data and undertake transactions for them. So, it creates a blended version of the transaction account in a way that’s flexible and suited to the customer.” Of course, existing apps such as Curve already allow users to view all transactions on their various bank cards in one place, using a technique called ‘screen scraping’. In these cases, the third-party app requires users to part with their credentials to log in on their behalf. Open API is different, explains Horlock. “It will provide a safe and secure way for customers to access their data without having to give their credentials away. The richness and functionality of the data available through the API is much better too. While screen scraping allows the customer to view transactions, open APIs will also allow them to trigger transactions.”
BRAVE NEW WORLD OF BANKING While the indications are that the average person is not aware of these developments, the Open Banking ‘ecosystem’ currently is still in development and the industry itself is still exploring the shape of things to come. Whether “OPEN BANKING CREATES A WHOLE NEW customers take to LEVEL OF COMPETITION, MOVING THE MARKET this innovative AWAY FROM THE TRADITIONAL CUSTOMER approach is RELATIONSHIP BASED ON OWNERSHIP OF DATA.” another question – given growing public unease over big data mining, gaining their trust may take time. The average account user might be wary of yet another aspect of their personal online lives and offers at merchants based on customer Paul Horlock, Nationwide Director of being open to algorithms and the uncanny transaction history. These developments may Payments, agrees that the implementation of personalisation they experience with, for ultimately lead to customers performing all the second phase relating to PSD2 will give example, Facebook advertising. their banking activities at different banks via rise to innovative new ways for customers to There may also be a concern that open a single user interface, which may be owned manage their bank accounts and their standard data sharing brings the risk of by incumbent banks, FinTechs or other third finances in the future, and to new third- security breaches and unprecedented cyber parties,” Tomlinson continues. party players in the market. continues over >>
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www.charteredbanker.com June/July 2017 31 OPEN BANKING
continued >> threats. The implementation entity Open customers are able to turn to a third-party savings with various banks and a mortgage Banking is quick to reassure that APIs and provider to manage their transactions, where with a different provider. Many believe they standards will be built on a ‘security first’ does that leave the banks’ relationships with would welcome the ability to see and manage basis, and that the trust of the customer is their customers? And how do they set all of those via a single interface provided by at the heart of its planning and production. themselves apart? their trusted banking provider.” This will extend to creating, alongside UK “There is a risk that banks lose ownership There is also the potential for budgeting and regulators, security measures and governance of the customer relationship,” confirms money management tools, real-time nudges structures for organisations accessing and Horlock. “Open Banking creates a whole and behavioural updates to help customers using customers’ accounts. “We will also new level of competition, moving the market keep track of their finances better. Horlock ensure that customers are fully protected away from the traditional customer identifies great potential in a banking institution against privacy and security risks and fully relationship based on ownership of data.” such as his helping its younger families who informed of the potential benefits and risks However, that risk should be viewed as face a complex range of budgeting and of sharing their financial information with an opportunity, he continues: “Open money management challenges. third parties,” the body states. Banking provides banking institutions with “If we can provide them with more Though government-backed reassurance just as much scope for innovation as it does flexibility and a realistic way to help them will hopefully encourage public trust and for third parties – it gives us the opportunity manage their money, that’s what we want to credibility, it will be the responsibility of to tie together different services and build on do. If we can tie together more opportunities banks and third-party players to ensure the relationship of trust we already have for them through Open Banking, that’s a security, and to communicate the benefits with our customers. really good opportunity for Nationwide to to their customers effectively. “By accessing meet those needs.” Horlock confirms that “the secure the accounts and Open Banking access ecosystem of APIs and the controlled process data they hold would also allow banking of registering the third parties who have elsewhere, we can institutions to build a been certified through the FCA will hopefully help our personal detailed financial profile provide a much safer, more consistent, more banking customers, of an individual customer predictable experience for the customer.” many of whom across all the products have rather complex and providers they use, REDEFINING RELATIONSHIPS financial lives – for paving the way to So, if retail banks no longer own their own example, current offering them highly customers’ transaction data, and those accounts and personalised services, rewards and incentives.
INSIDE OPEN BANKING STAYING IN THE GAME Open Banking means third-party providers ‘ecosystem’, such So, while the adoption are now able to see customers’ transaction as the API, security of Open Banking meets information and, as a result, offer more and messaging a regulatory requirement, competitive products and services. standards. The body includes nine banks it also opens the door to the creation of This industry-wide digital sharing of and building societies, mandated by the cutting-edge personal and business finance non-confidential customer transaction CMA, namely Allied Irish Bank, Bank of management tools. Exactly what these information is done securely via open Ireland, Barclays, Danske, HSBC, Lloyds would look like is unclear, as banks and standard, open Application Programming Banking Group, Nationwide, RBS Group other stakeholders explore the potential of Interfaces (APIs). Its alignment with and Santander, as well as challenger the new ecosystem. Payment Services Directive 2 (PSD2) also banks, FinTechs, third parties, consumer “There won’t be a big explosion come facilitates the development of innovative groups and other stakeholders. January 2018,” Horlock reassures. “It will be digital banking solutions that allow a staged process as we explore ways to help customers to manage transactions on CHANGE ON A ROLL customers become comfortable with it and accounts held with different providers The UK Open Banking framework is then start to offer personalised services in through a single interface. being developed and rolled out in two a new way.” stages. The first, which went live in The challenge for banks and building CUSTOMERS BACK IN THE FRAME March this year, makes information societies, as things become clearer, will This initiative was an outcome of a available on ATMs, branches, personal be to communicate the benefits and new Competition and Markets Authority (CMA) current accounts, business current propositions positively, while reassuring their retail banking market investigation which accounts and unsecured lending for SMEs, customers that the system is safe, secure and began in mid-2013. Its final order was and commercial credit cards. to their advantage. published in February this year and set out The second stage, aligned to PSD2, will Banking institutions do need to innovate a number of remedies, one of which is the allow account holders to give authorised rapidly so that they can meet their development of Open Banking. third parties consent to access their bank customers’ new-found desire for flexibility in The implementation body known as accounts, extract statement information managing their money. They’ll need to Open Banking Ltd was created in October and initiate payments, without having to leverage the strength of the traditional 2016 to develop and deliver a framework use their banks’ online services. It will go customer relationship to stay in the game to underpin the UK’s Open Banking live in January 2018. and remain their customers’ first port of call for financial services.
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32 Chartered Banker The voice of financial professionalism INSTITUTE PRIZEWINNERS
Louise Davis Winner of the Sir Recognising Bruce Pattullo Prize (awarded to the candidate scoring the highest average mark TALENT in the Chartered Banker Diploma examinations). The Institute is pleased to congratulate all “I’m honoured to receive this award having worked those members who appeared in our recently hard to complete the announced list of academic prizewinners. Chartered Banker Diploma over the past two years.” n addition to running the UK-wide Young Professional Banker Louise joined the Lloyds Banking Group Banker of the Year competition (see page Robert Taylor, Santander Graduate Programme in 2014 after 37), the Institute awards a number of prizes Team Leadership in Financial Services studying Psychology at the University of Ieach year to graduates who have attained Jake Ramsden, Santander York. Following a first role at Halifax, exceptional results in their examinations. where she managed branch processes MEMBERSHIP/CHARTERED and focused on improving customer DIPLOMA AND CERTIFICATE PRIZES BANKER PRIZES experience, she moved into Digital (Incorporating all specialist and bespoke (Incorporating all specialist and bespoke Marketing. Her final placement in qualifications) qualifications) Branch Design offered the opportunity Commercial Property Applied Business and Corporate to support the redesign of the bank’s Stephen James Marrow, Secure Trust Bank Banking current and future branch network. Complaint Handling James David Longley, Lloyds Banking Having completed the Graduate Charlotte Green, Santander Group Programme, Louise now works in Digital Credit Union Principles and Practice Banking for High Net Worth Customer Experience looking after the Peter Henson, No1 CopperPot Credit Individuals operations and processes behind Union Michelle Perry, Barclays customer-facing websites. Financial Crime and Money Contemporary Issues in Banking Laundering Bradley Jermy, Lloyds Banking Group Paul Riseborough Victoria Gee, Financial Ombudsman Services Credit and Lending Winner of the Hutton Introduction to Business Banking Katie Hewitt, Lloyds Banking Group Prize for Professional Abigail Cutler, Santander Retail Banking Ethics (a gold medal Introduction to Credit Gabriella Lobb, Lloyds Banking Group awarded to the Diane Dorothy McMillan, Lloyds Banking Retail Banking individual achieving Group Abigail Coe, Lloyds Banking Group the highest mark in Introduction to Credit Risk Management in Banking the examination for Professionalism, Abigail Cutler, Santander Jennifer Harris, Lloyds Banking Group Ethics and Regulation). Introduction to Credit Sir Bruce Pattullo Prize Paul is Chief Commercial Officer at Ricardo Melgarejo, Bank of China Louise Davis, Lloyds Banking Group Metro Bank, the first new high street bank Introduction to Risk Hutton Prize for Professional Ethics in the UK in over one hundred years. He Russell Ramcharan, Santander Paul Lawrence Riseborough, Metro Bank leads the bank’s product, digital, change Offshore Banking Practice Torrance McGuffie Prize and communications teams. His role Kerry-Lee Lowe, Guernsey Border Agency Naomi Walker, Lloyds Banking Group focuses on shaping Metro Bank’s commercial plan, ensuring the bank delivers products, services and user experiences that customers value. THE PEOPLE BEHIND THE PRIZES Prior to joining Metro Bank, Paul held various roles at Lloyds SIR BRUCE PATTULLO contribution by conferring him with the first Banking Group and HBOS plc, The Sir Bruce Pattullo Prize was established Honorary Life Membership in 1998. including Head of Strategy and through a generous donation given by Sir Bruce Planning and Head of Channel Pattulo CBE. WILLIAM L. HUTTON Planning in the retail banking Sir Bruce joined the Bank of Scotland in William L. Hutton, an Honorary Fellow of the team and Business Manager to 1961. He was appointed Manager, Investment Institute, kindly donated the Hutton Prize for the Chairman. Paul started his Services Department, in 1964 and made rapid Professional Ethics. Hutton completed the career in consultancy, working for progress through the ranks, eventually being Institute examinations in 1957 and then left the global policy and economics made Governor and Group Chief Executive in banking in 1964 to work in the pharmaceutical consultancy Oxford Analytica and 1991. industry in Africa. management consultancy PA A former Institute prizewinner himself, Sir In 1976, he set up his own business Consulting Group. He was Bruce was nominated to the Council in 1977, consultancy. This was based in Kenya, but educated at Nottingham, Oxford becoming a Fellow in 1978, Vice President in practised in various parts of the world. He is and Warwick universities and is a 1978 and President for two years from 1990. qualified as a Certified Fraud Examiner of the trustee of Making The Leap, a The Institute recognised this significant US Association of Certified Fraud Examiners. social mobility charity.
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www.charteredbanker.com June/July 2017 33 LIFELONG LEARNING GROW YOUR ONLINE NETW RK
inkedIn is the largest professional networking site available today, reporting more than 500m users in over 200 countries and territories in April 2017. LBut the popular platform offers more than just a means to connect and stay in contact with millions of users; it is also a leading tool for helping individuals to expand their networks, exchange knowledge and ideas – and find relevant jobs in their field.
LinkedIn allows you to: MARKET YOURSELF LinkedIn helps you to reach a much wider audience and publicise your experience to recruiters, organisations, existing connections and specialist groups. Make sure you aim for an ‘all-star’ completed profile. Recommend and endorse your connections’ skills, past work or projects; it’s a two-way system.
STAY UP TO DATE LinkedIn helps you to find groups and experts to learn from and engage with. By joining groups that you are interested in, you can ask questions, share knowledge and experience and learn more about current news and thinking in your industry. Follow companies and influencers and let the information come to you. Use a learning library to enhance personal development (only available with Premium access). BUILD YOUR PROFILE personable, photo. Avoid group photos; it’s 1. Introduction best to upload a picture that is just of you. RECONNECT This is your chance to let connections, 3. Contact information As well as searching for jobs and opportunities employers or recruiters know more about • Include as much contact information as to support your career development. You can you. It’s an opportunity to market yourself, you feel comfortable sharing. Ideally use LinkedIn to find people by keyword, title, attract interest and make someone continue include a personal email address industry, location, company, function, reading about you. • Change your LinkedIn profile URL to a experience level and more. You can also • Write a professional and personable personalised URL (go to ‘Privacy & reconnect with people by searching for your summary of yourself Settings’, then ‘Privacy’) so it reads school or university. • The profile you have already prepared uk.linkedin.com/in/firstnamelastname. for your CV may be helpful to use in You can add this URL to your email Tip: when sending an invitation to connect, this section signature and on your CV always include a note explaining why you • Make sure it is tailored to what you are • Do not add your full date of birth. want to connect and how the other person marketing about yourself, your career Month and date is fine, not the year you can benefit from your contact – it can goals or experience were born. reduce your chances of being ignored. • Recruiters and hiring managers search by 4. Experience keywords, so add as many relevant ones • Add an overview or one or two sentences as possible e.g. Manager | Change | about your position at each company you “LINKEDIN HELPS YOU TO Project | Financial Services or Head of have worked with. In some cases, you Global Sales and Business Development | may also want to explain what the MARKET YOURSELF TO A Financial Services | Mentor. company does/did MUCH WIDER AUDIENCE.” 2. Photo • Be sure to add correct dates as well as Always upload a professional, but connect each employment to the right
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34 Chartered Banker The voice of financial professionalism TERESA ROBERTSON explains how to use LinkedIn to build and engage with your professional network.
KEY FEATURES HOME PAGE • More likes mean more Get to know your visibility, so get creative Homepage well and view it with your content daily to stay up to date with • ‘Like’ and ‘share’ the latest news in your information that you network. Some of its great find on your Homepage. • Search for jobs on features include: It may benefit others in LinkedIn • LinkedIn Today – news your network and • Save (i.e. bookmark) jobs featured by LinkedIn increase your visibility. that you would like to • Network activity updates COMPANIES apply for – including newly formed Follow companies you • Review the profiles of connections are interested in to: hiring managers and • Suggestions of people • Receive their updates on discover if any of your you may wish to connect your Homepage own contacts can with, influencers you • See how many introduce you to them might want to follow or connections you have • Follow different groups you may like linked to that company companies and receive • Information on who has • Check for vacancies in notifications about new viewed your profile and the ‘Careers’ tab jobs. updates/posts • Find out which similar GROUPS • Jobs you may be companies or competitors • Join relevant groups by interested in. other people viewed searching by keyword. SHARING • Research a company and • Select which groups are • Sharing articles or its key personnel displayed on your profile updates is a great way • Get live updates from and in what order to inform people about the company – this can • Connect with members your own updates and be great preparation for of the same group whether you are looking an interview. • View their activity feed for new opportunities JOBS within the group and like • LinkedIn is not Facebook, Employers and recruiters use posts they have added so keep your updates LinkedIn to advertise jobs or • Engage in group professional, work- to search for potential discussions to raise related and non-offensive candidates. You can: visibility.
company page (when the logo appears your connections to “endorse” your skills, alltogether as they devalue the on the right you know it has worked) which shows potential employers that recommendation in the first place as it • Use bullet points below the description if other professionals are confirming that looks as if you are doing each other favours possible to demonstrate evidence of you possess these skills. • There is no limit on the number of competencies, skills and achievements. 6. Recommendations recommendations you receive. You do 5. Skills and endorsements • Ask previous employers, clients and other have the choice of making all or some • You have the opportunity to add Skills & connections to recommend you on of your recommendations visible. Expertise to your profile. These skills LinkedIn – sometimes connections will do should reflect and combine your wealth of this automatically without you having to Teresa Robertson, Chartered MCIPD, is expertise and experience that you possess. ask them Business Partner – People, Planning & You may have already mentioned some of • Leave 14 days in between recommending Communication at the Chartered Banker them in your profile and Specialities someone who has recommended you Institute. • When adding skills, you are welcoming • Avoid back-to-back recommendations
KEY TAKEAWAYS • Aim for an ‘all-star profile’ • Add projects or courses to enhance • Personalise your LinkedIn URL – it your profile looks good • Check out ‘Influencers’ to see what • Keep an eye out for changes – • Do upload presentations and videos they are saying about the topics you LinkedIn continually changes you have been involved in – there’s are interested in and evolves space in your profile, under each • Download the app and • Become a member of the Chartered position of employment use LinkedIn on the go Banker LinkedIn group.
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www.charteredbanker.com June/July 2017 35 Take your executive education to the next level A new partnership between the Chartered Banker Institute and the Institute of Banking has brought the prestigious Certified Bank Director Programme to the UK for the first time.
The programme is ideal for: FOR FURTHER INFORMATION CONTACT: • Existing executive/non-executive directors, whether Eva Kiss, Admissions and Programme Manager, new to the role or experienced professionals operating Certified Bank Director Programme in a rapidly-changing landscape (Executive Education) at The Institute of Banking • Senior banking managers with ambitions to join Tel: +44 1611 6589 the board. E: [email protected] The programme comprises nine modules delivered over ten days across two blocks of five days’ duration each. A panel of subject area experts drawn from academia and industry lead each of the individual modules. The emphasis of the programme is on the application of key concepts to enhance the skills of participants and to create a learning forum where challenges can be explored and wisdom and insights dissected and shared. The Chartered Banker Institute is the trading name of the Chartered Institute of Bankers in Scotland, the oldest institute of bankers in An assessment is attached to each module to ensure the world, and the only body approved by the Privy Council to award that the learning outcomes associated with the module the flagship Chartered Banker designation to qualified bankers. have been achieved. The Institute of Banking is the largest professional institute in Ireland.
to contents www.charteredbanker.com August/SeptemberApril/May 20162016 36 YOUNG BANKER OF THE YEAR the final COUNTDOWN
Meet this year’s Young Banker of the Year contenders who, for the first time, will compete in two live semi-finals in Edinburgh on 7 June and Manchester on 20 June. Four finalists will then proceed to September’s showdown at Mansion House, London.
ADAM ARNOTT ALEXANDER CHISHOLM JOANNA FINLAY Group Payments Strategy Manager, Wealth Manager’s Assistant, Coutts Product Manager, Virgin Money Tesco Bank
Alexander has worked at Coutts for six Joanna leads the development of the basic Adam works as part of a team years. He is currently a Wealth Manager’s banking proposition, drives improvements in responsible for co-ordinating the Assistant for the Executives’ client group, customer outcomes and operational approach to payment strategy across supporting two wealth managers with efficiencies, and champions financial Tesco Group including bank and retail combined assets under management of inclusion for those in our communities who businesses both in the UK and over £100m. Prior to this, he spent three most need help. internationally. His previous role was years in the Coutts 24 contact centre, Joanna gained experience in business New Product Development Manager taking calls from the firm’s varied and banking, product management and for the bank’s credit and debit card unique client base. executive support roles at Barclays and products. He first joined Tesco Bank Before joining Coutts, Alexander was Northern Rock before joining Virgin Money on the leadership graduate programme introduced to the financial services as a strategy analyst. She worked for three following his graduation from the industry through his role as a contact years in the culture team, engaging University of Strathclyde where he centre worker for HSBC. His previous colleagues in the mission to make ‘everyone studied Law and English. jobs have included bookseller, charity better off’, and continues to help drive Adam is a creative, dynamic and shop assistant manager and working for colleague engagement within the enthusiastic professional with a focus the City of Edinburgh Council’s commercial function. on innovation, business strategy/ environmental services. She hopes that this competition will help development and design. He’s He has a degree in sociology from the increase awareness of the need for practical passionate about political and social University of Edinburgh and a interventions for financial inclusion and the issues with a determination to postgraduate MSc in IT from the life-changing benefits that banking can give champion ethical finance. University of Stirling. to the poorest in society. continues over >>
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www.charteredbanker.com June/July 2017 37 PAGEYOUNG HEADING BANKER OF THE YEAR
continued >> vision to be number one for customer service, trust and advocacy by 2020. He recently graduated with the One Planet MBA from the University of Exeter, giving him a better understanding of how organisations align themselves to changing business environments by creating shared value. Mithil’s personal interests include scuba diving and triathlons.
AMY CLARKE IAN HUMPHREYS Senior Personal Banker, NatWest Digital Care Manager, Virgin Money
Amy Clarke manages a small client portfolio Ian has worked in the contact centre at at NatWest in Enfield Town. It is her Virgin Money for the past nine years. He responsibility to build strong customer has supported the team and customers in relationships and help improve their financial a number of roles, from complaint position. Amy is ambitious and creative and analysis and communication development always looking for new ways the bank can to managing teams of people. help its customers. Ian is currently Digital Care Manager, She joined NatWest as an apprentice in responsible for both the operational and October 2015 and has since attained many strategic development of Virgin Money’s qualifications including the Professional digital customer channels, including social Banker Certificate and Level 3 Certificates in JAKE BROWN media, webchat and online support. He Providing Financial Services and Professional Business Growth Enabler, NatWest married his wife, Rachel, last year and is a Banking. Amy has also completed her keen American sports fan. Advanced Level Apprenticeship in Banking. Jake is the face of NatWest in his local She proactively supports charitable business community, connecting new and causes such as the North London Hospice existing customers with relevant internal and and the David Sheldrick elephant orphanage external services to help them meet their in Kenya. growth targets. His work involves organising and participating in business networking/ educational events and forums throughout the Cheshire area. Jake joined the bank in September 2015 as part of the Operations and Specialist Graduate Programme. He has worked as a change analyst within commercial and private banking services and most recently in the procurement division as a supply chain analyst. STACY LAMB Head of Improvement Strategies, Tesco Bank
Stacy has had an extensive career in banking since joining a graduate banking programme in 2005 on completion of her university MITHIL SHAH degree. She previously worked at HSBC as a Business Analyst, The Royal Bank of branch manager before joining the senior Scotland leadership team within the Premier and High Net Worth division. Mithil is a business management Stacy has recently been named in ‘The professional with over seven years of Power 50’, recognising the most talented diverse experience in banking, insurance, individuals in the digital banking industry in training and sales across the UK and Europe. India. He is currently on the graduate Stacy is a member of the Women in programme at RBS, working in Business Network and is a mentor to resolution planning across various CHARTERED graduates who are embarking on a career in departments. This exposure has given financial services. She enjoys running as well him a wide understanding of how the BANKER as advocating and fundraising on behalf of bank is working towards meeting its Maggie’s Charity.
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38 Chartered Banker The voice of financial professionalism Raising THE BAR The winner of the 2016 Young Banker of the Year Award Audience Prize, Liam Gover, shares his experiences from two weeks spent working at the Banking Standards Board.
believe as an industry we can often get to easily compare different banks and their too fixated with individual performances products so that they can ensure they are and targets. The industry has a plethora getting the best value as well as the of skilled and competent individuals product that best meets their needs. with different strengths and weaknesses The above work led to us thinking about and we should do more to utilise these. the changing landscape of banking and IThe more we work as a team, the more we where the role of ‘relationship manager’ fits learn, and the more we learn, the higher our in. This drove two key questions for me. standards will become. I firmly believe we need this approach at an industry level. Banks need to work • Would customers prefer to pay together to share best practice and for an appointed face-to-face consistently evolve as an industry to ensure relationship manager or have a that we are providing the best possible free service that feeds them into experience to our customers. a call centre? Liam Gover • How can banks add value when 2016 BSB Audience Award winner A FRESH PERSPECTIVE it comes to educating customers During my time at the BSB I was involved in around the factors considered when looking at consumer outcomes, especially in evaluating a lending application? relation to SMEs. Clarity and transparency were the keywords that kept coming up time and exams need not focus only on financial and again. Customers want products and DEFINING PROFESSIONALISM analysis competencies – ethics and services to be simple to understand and Professionalism was one of the most professionalism are equally important. priced in a straightforward format. Several interesting areas I got involved with at the The assessment team reinforced the banks are investing in this area, making BSB as I’m a huge advocate of professional message to me that the BSB is not here to T&Cs easier to understand and improving qualifications in banking, but the BSB’s act as a regulator, but exists to challenge and the delivery channel and approach. recent Annual Review suggests most staff support the industry. This is reflected in the We also examined the competitiveness believe they and their peers have the fact the BSB assessment framework is not of the industry and the numbers of competencies necessary to perform their job. predicated on what a good culture should customers who switch banking providers – So, if people have the skills, is it the look like. Instead it defines nine or rather who don’t, due to a perception decision-making that needs looking at? Can characteristics that you would expect to be that ‘all banks are the same’ and ‘the exams improve things or is professionalism, associated with any good culture in a bank process is too complicated and or lack of it, more of a reflection of a firm’s or building society that is focused on serving cumbersome’. Customers need to be able culture? I believe both have a part to play the needs of its customers, staff and broader society. These include responsiveness, respect, accountability and openness. I wanted to end by saying thank you to “THE ASSESSMENT TEAM REINFORCED THE MESSAGE TO everyone at the BSB for making me feel so welcome and how excited I am to be part of ME THAT THE BSB IS NOT HERE TO ACT AS A REGULATOR, an industry that will use the information the BUT EXISTS TO CHALLENGE AND SUPPORT THE INDUSTRY.” BSB provides to raise standards and improve trust in the banking sector.
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www.charteredbanker.com June/July 2017 39 CB:PSB PROGRESS REPORT 2017 DRIVING STANDARDS
ust over five years since its a proud member of a strong professional Key findings show 40% of UK adults inception in 2011, the CB:PSB body is the norm for everyone.” believe that staff who meet professional continues to be the driving force in Particular highlights for the past year standards would make them trust the UK progressing and embedding covered in the Report include an expanding banking industry more. And over half of professional standards across the membership of 10 firms as Shawbrook Bank banking employees believe that the industry. The initiative’s Progress joins the fold, the publication of five years’ Foundation Standard helps them provide JReport 2017, its fifth annual report, shows worth of research on trust and confidence in a better service to customers. how it continues to act as a catalyst for banking, and the encouraging fact that over putting professionalism on the agenda during a third of the UK’s banking professionals met CAREER-LONG COMMITMENT a period of change in the banking industry. the Foundation Standard in 2016, despite Its flagship Foundation Standard remains When the CB:PSB was formed, structural changes in the industry. an important focus for the CB:PSB. In 2016, discussions about professionalism in banking nearly 145,000 individuals – 36% of the UK were few and far between. The Institute and NOW THERE ARE TEN banking workforce – met the Foundation CB:PSB founder firms were the only ones The CB:PSB gained a new member in April in Standard. For many this will be the third discussing this agenda as a collective. Shawbrook Bank, a specialist UK savings and consecutive year that they have Nearly six years on, a new regulatory lending bank founded in 2011 to serve the demonstrated their commitment to regime is in place and there are other bodies needs of SMEs and individuals in the UK professionalism. Achievement figures are focusing on professionalism. The CB:PSB is with a range of lending and saving products. lower than in 2015 due to restructuring and no longer a ‘special project’, but part of a This takes the total number of member firms ring-fencing, which impacts both the size much broader, richer landscape of initiatives to 10 and demonstrates the continuing desire, and shape of UK banking. and individuals working to drive the from within the industry, to work collectively The Intermediate Standard, launched professionalisation of the banking industry. to raise and maintain standards. in March 2017, complements the CB:PSB’s existing professional standards and completes its initial suite. It is intended as a next step for individuals who have achieved “THERE IS POTENTIAL TO GENUINELY BE ABLE TO CALL the Foundation Standard. The Intermediate BANKING A PROFESSION, NOT BECAUSE WE WANT TO TALK Standard can provide a bridge between the ABOUT IT IN THOSE TERMS, BUT BECAUSE THE HALLMARKS OF Foundation and Leadership Standards for PROFESSIONALISM ARE EVIDENT ACROSS THE INDUSTRY.” individuals, and firms, who want to demonstrate a career-long commitment to professionalism.
A STEP CHANGE IMPROVING CONFIDENCE INDEPENDENT OVERSIGHT The drive to develop and enrich the Since its inception, the CB:PSB has worked The CB:PSB Independent Monitoring Panel professional agenda is moving into other to quantify both its impact and changing (IMP) was set up in October 2016 and is fully areas. Firms are now looking to integrate public perceptions of the industry. Five years’ independent of the CB:PSB and its member their approach to professional standards and worth of research is published this month in firms. Its aim is to monitor the effectiveness qualifications – this is a very positive a new report entitled ‘Building development. The CB:PSB has helped to Professionalism in Banking’. The research make professional standards a mainstream reveals improving levels of confidence and issue, and that is a success in itself. trust in individuals, banks and the industry, As CB:PSB Chair Lady Susan Rice notes in as well as improving views on her welcome to the Report: “I believe there is professionalism in the industry. potential for a step change – to genuinely be able to call banking a profession, not because we want to talk about it in those terms, but because the hallmarks of professionalism are evident across the industry – a common Code of Conduct, Professional Standards, where gaining professional qualifications and being
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40 Chartered Banker The voice of financial professionalism The Chartered Banker Professional Standards Board (CB:PSB) continues to drive professionalism across the banking industry, as shown in its newly published Progress Report 2017, says HELEN BOGAN.
of CB:PSB standards implementation and challenge to the banks and CB:PSB – to whether the CB:PSB is delivering its aims. further the professional standing of “The Panel independently reviews, provides individuals in banking and to win over the challenge, and, where we believe there are respect, confidence and trust shortcomings, recommends improvements of the public in the long term.” to the CB:PSB Board,” writes IMP Chair Dr Ian Peters, who is Chief Executive of the Chartered Helen Bogan is the Institute’s Head of Institute of Internal Auditors. Professional Standards. “It consists of myself and four leading experts in their fields. Collectively we bring a passion for ensuring that the external scrutiny of the CB:PSB is robust. This is vital to strengthen public trust in this important work – to set, implement and maintain professional standards – and to confirm that the CB:PSB is delivering on its aims.” The IMP will publish its first annual report in September 2017.
FORUM FOR EXTERNAL CHALLENGE The Stakeholder Forum facilitates engagement with a broader range of ‘end users’, including consumer groups, regulators and industry representative bodies. It provides an opportunity to cascade information and, more importantly, to seek external feedback, opinions and advice. This year’s Stakeholder Forum event takes place in June. “I look forward to another lively and engaging session,” says Forum Chair Professor Robin Jarvis, Professor of Accounting at Brunel University. “We are keen to continue our engagement and
ABOUT THE CB:PSB
The CB:PSB is a unique voluntary initiative professional standards have defined what it between UK banks and the Chartered means to be a professional banker. Banker Institute. Established in 2011, before The CB:PSB partners Barclays, Clydesdale banking culture and conduct became a key and Yorkshire Banks, HSBC, RBS, Sainsbury’s issue for policymakers and regulators, the Bank, Santander, Shawbrook Bank, Tesco CB:PSB set out to develop and embed Bank, United Trust Bank and Virgin Money. professional standards for individual For more information, see The CB:PSB Progress Report 2017, bankers, and lead the re-professionalisation www.cbpsb.org, follow @cbpsb on published in early June, can be of UK banking. Twitter and join the professionalism accessed at www.cbpsb.org In just over five years, the CB:PSB’s conversation #drivingprofessionalism
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www.charteredbanker.com June/July 2017 41 BANKING AND PAYMENTS TECHNOLOGY that lifts your business
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© 2012 FIS and/or its subsidiaries. All Rights Reserved. to contents REGULATORY ROUND-UP EMBEDDING cultural change Consumers, particularly those that can be considered vulnerable, remain at the heart of the Financial Conduct Authority’s mission statement, released in mid-April in conjunction with its 2017/18 business plan.
our years after its inception, THE SPIRIT OF REGULATION Drilling down to particular priorities, the the Financial Conduct The FCA’s mission statement is built FCA has stated that, in this business year, it Authority (FCA) has taken an around its vision to strengthen the plans to ensure that initiatives such as the opportunity to clarify why and ‘societal purpose’ of the UK banking Senior Managers & Certification Regime BANKING how it is serving the public sector by keeping the needs of the (SMCR) are fully implemented and interest, along with the range customer at the heart of its activities. embedded into banks’ business operating Fof activities it is undertaking to meet this Individual bankers, it highlights, are models. core priority. being asked to consider the impact of “We are one year into this initiative, AND PAYMENTS The mission statement, it says, “explains their decision-making on the customer. and this is the first time that the FCA has the intervention framework for the Here we see a subtle shift in messaging, been able to view how firms are building strategic decisions the FCA makes, the says Shona Matthews, Head of Regulation this into their own business plans,” says reasoning behind its work and the way it and Policy at the Chartered Banker Matthews. “It’s time to ask – is it on the TECHNOLOGY chooses the tools to do it.” Institute. “The message is clear: the FCA is agenda when companies are setting their Central to the mission is the aim to add focusing on whether banks are acting in business plan priorities?” ‘public value’ – to contribute positively to the spirit of the regulatory framework, The spirit of how firms are that lifts your business society – by improving how financial rather than simply applying the letter of implementing the SMCR will make a huge markets operate, so that individuals, the law,” she explains. difference, she explains. As FCA Chair John businesses and the UK economy all benefit. “These are challenging times of great Griffiths-Jones notes in his opening to the While it remains a high-level document, the economic and political uncertainty, along mission statement: “There is a clear link mission outlines five broad areas of focus: with rapid technical developments – which between poor culture and poor conduct, • Enhancing trust in markets could revolutionise the sector – and and the sector must continue its work to FIS™ is the global leader in banking and payments technology. We offer a powerful combination • Improving how markets operate increasingly diverse consumer needs. In the achieve and embed cultural change.” of software, services and deployment options that will lift your business. Our solutions cover: • Using regulation to make the UK a face of these challenges, the FCA has used Matthews points out that the Institute is better place to do business this document to establish that it will acting as a powerful driving force in advancing • Working to prevent problems prioritise, protect and intervene – ethical professionalism and cultural change • Core banking and lending • Cheque imaging occurring consistently, efficiently and clearly.” with its programme of ethics training and the • Card management • Channel and eBanking solutions • Helping to put things right if they In doing so, the FCA also aims to Chartered Banker Professional Standards • EFT switching • Risk and fraud management do go wrong. establish the boundary between the Board (CB:PSB) initiative (see page 40). The FCA also says it plans to publish further regulator’s work and the responsibilities of She concludes: “It’s vital that the • ATM management and outsourcing • ITO and BPO documents explaining how it carries out its firms, stating in the business plan executive relevant people are aware of their duty of main activities – authorising and supervising summary that “firms themselves will responsibility, a change that came in last FIS has been operating in the UK and Ireland for more than 20 years and employs a team firms, taking enforcement action, always have the most important role to year. Individual understanding and encouraging competition and influencing play in ensuring continuing trust and acceptance of this new level of of business and technology experts in the region, as well as leveraging our global breadth. market design. Crucially, it will publish an confidence in the UK’s financial services”. accountability and responsibility seems to additional document this summer reflecting To some extent it also touches on the be at the heart of how our sector can be Financial institutions worldwide trust FIS to keep them at the forefront of the payments its approach to consumers. responsibilities of consumers themselves. driven by societal purpose.” revolution. Isn’t it time you joined them? Find out more at www.fisglobal.com or call us on +44 (0) 1923 471 850.
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© 2012 FIS and/or its subsidiaries. All Rights Reserved. to contents
www.charteredbanker.com June/July 2017 43 LESSONSCHARTERED LEARNED BANKER MBA LOOKING BACKWARD, MOVING FORWARD BERNARDO BÁTIZ-LAZO and LEONIDAS EFTHYMIOU invited academics and industry experts to consider the past, present and future of retail payments. The resulting conversations, published in The Book of Payments (Palgrave), suggest the rise of digital banking has compelled strategists to look back – as well as forward.
he past, present and future of Understanding the changing nature of (and sometimes the timing) of change in retail payments, technological payment “rails” led us to explain the interaction retail payments, but also frame the social change and, more specifically, between the institutional underlining and processes around it. Many (if not most) of the role of computer technological innovation in retail finance. This our contributions focused on stories of applications in retail financial required analysis of the problems and challenges success and cost control. intermediation, were explored for consumers in, say, adopting and using Twhen 44 individuals – academics and payment cards (whether in urban centres or in FROM CONCEPT TO CRITICAL MASS industry experts from across the globe – rural locations) as much as the sources of credit While some contributors openly defended debated the challenges posed today by the for merchants. For instance, we learn how the use of banknotes in everyday life, others rise of digital banking. similar today’s marketing of digital solutions by were veteran pro-cashless soldiers of the The illustration below depicts the banks and payment card companies is to the “war on cash”. The latter made plainly contributors’ top 100 concerns, which mostly launch of the first credit and debit cards in obvious the degree to which a cashless revolved around the central role depositary the 1960s and the 1990s respectively. economy emerged around “traditional” financial institutions (such as commercial The entrepreneurial challenges of payment banking from the 1950s and 1960s until banks, savings banks, co-operative banks, systems faced by both established participants today. Sometimes this resulted in new ways credit unions, microfinance institutions, etc) and new entrants were also a key concern. of payment and new customer groups, while have played – and will continue to play – in This was relevant given that today’s FinTech others (and especially more recent the cashless economy. attention focuses on the potential of individual developments) have cannibalised banks’ space within retail payments. The extent to which the cashless economy has been claiming its own place within domestic and globalised technological environments is evidenced by the likes of direct payment of wages, direct debits, “tap and go” (i.e. EMV compliance) and PayPal. Meanwhile the likes of distributed ledger technology, digital currencies, crowdfunding platforms, person-to-person loans, e-wallets and online barter, amongst others, point to a potential transformative phase that is, in its majority, unregulated. While many of these new applications hold SOURCE: AUTHORS’ OWN DESIGN great promise, they also need to go beyond the “proof of concept” stage and achieve FRAMES OF REFERENCE start ups. For instance, when documenting the “critical mass” to be credible players. Central to the illustration are financial case of Mondex in the 1990s, we were The research revealed a payment institutions, and, as contributors explained, reminded that innovation is also driven by ecosystem full of contradictions. Paradoxically, the long-term process through which banks established participants in financial services. the increase of retail cashless payments goes inserted themselves in the exchange of value Hence, contrary to general perception and hand in hand with the increase in the to become (and remain) the centre of the when looking at developments in the long-run, demand for cash; the development of a retail payments ecosystem. Looking forward, we find that financial institutions have been Single European Payment Area is tested in an our contributors aimed to clarify how active in finding new forms of payment while economic union of sovereign countries competition between mobile payments, investing in untested technologies and devices. growing and developing at different speeds; digital currencies and payment cards will The pivotal role that the government, and cashless technologies driving financial shape the future of the retail financial system regulators and regulation play in the financial inclusion clash with strong preferences to use in different countries and the role of banks in system runs throughout the book. These are banknotes. Regarding the latter, our that process. not only important in managing the process contributors explained that digital initiatives
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44 Chartered Banker The voice of financial professionalism seeking greater financial inclusion are also seen with doubt and reluctance from people “In the midst of a dynamic, non-linear and ever-changing working and living in the cash economy environment, people’s payment choices are driven not by because they mistrust initiatives that could a cash(less) antagonism, but simply by preference, taste, increase their fiscal burden while feeling there trust, accessibility, convenience and transaction patterns.” is “little value for money” in paying taxes in countries where corruption is rampant.
FOCUS ON INFRASTRUCTURE On balance, the research led us to believe History has taught us that the uses of new At the same time, there is a dearth of that there is still scope to better understand technologies are uncertain and we need to contributions considering the large and how and why there is so much failure to know more of how regulation and regulators substantial investments in making things work. In contest retail payments. Future research influence this process. So, the role of other words, we ought to stop our enthrallment could be approached from different regulators, regulation and supervision are in with the “white heat” of innovation, our perspectives such as: particular need of detailed research as they obsession with “firsts”, the heroic stories of the are frequently criticised as the “bad lone-wolf entrepreneur, and start paying more • explaining the lack of adoption by hombres” that stifle innovation in financial attention to maintenance and the general consumers services but these claims are often made with process of preserving and keeping in good • how consumers find new ways to use little empirical support. condition the retail payments infrastructure. new technology (i.e. domestication) If there was one central idea running from • the challenges to abandon investments in cover to cover, this would be that the future of long-established technologies (i.e. path money is an illusion because in the midst of a Bernardo Bátiz-Lazo is professor of business dependence) dynamic, non-linear and ever-changing history and bank management at Bangor • how can we develop more effective environment, people’s payment choices are University (Wales). His research interests revolve management of innovation within driven not by a cash(less) antagonism, but around innovation and the adoption of organisations (including querying simply by preference, taste, trust, accessibility, computer technology in retail banking. Leonidas organisational memory) convenience, social norms and transaction Efthymiou is a lecturer in marketing at • the role of security, industrial and patterns. In short, there is no “oracle” able to Intercollege Larnaca (Cyprus). His research technological networks as much as trends successfully forecast innovation – at least, not interests revolve around tourism management in the globalisation of retail payments. in retail payments. and the automation of everyday life.
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www.charteredbanker.com June/July 2017 45 PROFESSIONAL FINANCIAL ADVISERS ENGAGING THE CONSUMER Despite interest rates remaining lower for longer and the new tax-free ISA limit of £20,000, savers aren’t flocking to invest in stocks and shares. What’s holding them back and how can providers unlock this significant market potential?
ccording to a recent savers greater choice, boosting business for greater product transparency, can boost nationwide survey carried PFAs and tackling the high level of misselling consumer confidence and understanding. out by MetLife, 45% of that continues to cast a pall over the sector. Reiterating that financial advice is not just for ISA savers believe the Charles Roxburgh, Director General, those with large sums of money to invest is current rules and options Financial Services at HM Treasury, says: “At a also crucial. Report for stocks and shares ISAs time when more and more people are co-author, Tracey McDermott, who was Aare too complex. In addition, almost a quarter seeking financial advice and guidance, we acting Chief Executive of the Financial are confused about the choice of fund or have set out how we can deliver a vibrant Conduct Authority (FCA) until July 2016, says where to seek advice. financial advice market that works in the that the measures recommended “are aimed With over two-fifths of those regular interest of all consumers.” at giving firms the confidence to deliver savers stating that they would increase their streamlined advisory services focusing on investment if they knew how to access TACKLING CONSUMER specific consumer needs”. advice, professional advisers are missing out ENGAGEMENT on a substantial tranche of business. The Harnessing technology such as automated TOO IMPORTANT AN potential is significant, with the market value advice services, streamlining processes and OPPORTUNITY TO MISS of Adult ISA holdings standing at £518bn at linking up with community or workplace The increase in the ISA savings limit makes the end of 2015/16. services are just some of the ways that can the ability to access advice even more help to reduce the costs associated with important, according to Simon Massey, BARRIERS TO ENGAGEMENT financial advice. At the same time, these Wealth Management Director at MetLife UK: Concern around consumer engagement with steps can help improve the availability and “Savers should be getting independent face- the market for financial advice was subject to accessibility of advice. to-face advice if they are investing such large an FCA review (The Financial Advice Market The FCA points to the increasing demand sums, and the concern is that the current Review), with a report published in March for individuals to accept responsibility for their rules and options are too complex.” 2016. Barriers to engagement broadly fell own financial futures. Removing some of the It seems then that the failure to tackle this into three categories: mystery associated with stocks and shares, issue is too big an opportunity to lose – for • Affordability through better both the professional advisory community and • Accessibility education and for UK savers. It also seems that the FCA is • Liabilities and consumer redress. working on steps that will help rebuild Addressing these barriers at an industry and trust in advisory services, reduce some individual level may hold the key to giving of the complexity and engage consumers more readily. For PFAs, keeping abreast of these changes and building more open and engaging services is crucial.
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46 Chartered Banker The voice of financial professionalism PERSONAL DEVELOPMENT For the greater good? Making economies is a challenge, particularly when competitive advantage hinges on a strong record of keeping costs down. Must banks accept that they cannot satisfy every stakeholder, asks BOB SOUSTER.
THE SCENARIO
GT Bank is a regional Firstly, the bank has identified its proposals, with accusations that the banking organisation current accounts as a high-cost product bank was abandoning some of the operating from an which adds little financial value. The more vulnerable people in society. industrial city. It has 20 majority of TGT Bank’s customers have Many commented that the branch branches, all located cheque books, and although their use closures would increase costs for within a 200km radius. has diminished in recent years, the local businesses, the owners of which TMany of the branches are in towns rate of decline in the volume of cheque would have to drive considerable where there is little competition from transactions has been slower than the distances to carry out routine other financial institutions, but with national average. The bank offers an banking transactions. Some added populations sufficient to generate efficient online service for electronic that, by going to the bank less often, sustainable business. payments, but many customers their insurance costs would be driven The bank has built a good continue to make payments by writing up as they would have to keep larger reputation in its heartlands, and has a cheques. The board is convinced that it cash floats on the premises. loyal customer base. In its home city, will have to withdraw cheque books, The reaction to the proposal to many of the residents are in well-paid phasing them out gradually, or withdraw cheque books was employment with a large supplier of introduce account charges. surprisingly negative. Some military hardware to the government, Secondly, the board has decided customers stated that they had no and the bank holds accounts for many that five of the branches are not other way of making payments as of the workers and their families. In financially viable in the long-term. they had no computer and no IT the areas served by the branches, The majority of customers of these skills, while others felt it was customers are typically more affluent branches live in rural locations and unreasonable to expect people to families. In fact, the demographic there has been a reduction in footfall, change their banking habits when profile of the region has changed though many older customers and they had been depositing their significantly in the last twenty years, local businesses rely on them to salaries without receiving any as young people often move away access cash. interest for all of their working lives. permanently once they have As the bank has always adopted completed their education. transparent policies with customers, As the board predicted, the two One of the reasons why TGT Bank it embarked on a consultation options were unpopular. What has maintained a competitive exercise with them through a should the bank consider in advantage over its bigger rivals has questionnaire, supported by deciding on its course of action? been its ability to contain costs. It discussions in the local newspaper Is it enough if the majority of has invested wisely in information and the regional radio station. The customers accept the changes as technology and has forged agency feedback strongly opposed the an inevitable consequence of relationships to enable data processing progress, with minimal adverse to be carried out without incurring effect on daily life? direct employment costs. However, in “Customer feedback strongly the last two years the bank has been By working through this scenario and forced to seek economies, and the opposed the bank’s two developing your own solution before board is now convinced that it will cost-cutting proposals, with reading the author’s analysis, you may have to pursue cost-cutting measures accusations that it was claim up to one hour towards the in respect of certain products and abandoning some of the more professionalism and ethics component channels to market. Two courses of vulnerable people in society.” of the Institute’s CPD scheme. action are now being considered.
continues over >>
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www.charteredbanker.com June/July 2017 47 PERSONAL DEVELOPMENT
THE ANALYSIS
continued >> The theme of this case should be a familiar one; the banking industry is no stranger to rationalisation of less profitable services and branch networks. It is also predictable that a significant proportion of customers will oppose – and some will actively resist – changes that have an impact on the ways in which their financial affairs are conducted. Basic marketing theory suggests that life is simpler than this. Marketing is about identifying customer needs and channelling the organisation’s “Most companies now agree the sustainable resources to addressing those needs. long-term prosperity of a company is dependent As always, real-life experience on addressing multiple stakeholder obligations, but demonstrates that this is sometimes not straightforward: just as Heinz it is impossible to fulfil all claims simultaneously.” found that customers were turning their backs on salad cream but were outraged when it was to be withdrawn, Branch closures are equally The most common, and least the manufacturers of the Subbuteo controversial. Branches are used less confrontational, way of addressing table football game met formidable and less every year for everyday this issue is to adopt utilitarian resistance to the decision to cease transactions, yet branch offices are solutions. These imply that the production. Both companies changed relied upon by a minority of company should act for the ‘greater their minds. If marketing success customers. The arguments against good’ or a course of action that depended on pure logic, why are vinyl closing a branch are well documented, will bring about least harm to the records now enjoying a rebirth? and customers’ resignation at the majority. Many laws of the land reflect Cheques are declining in news of yet another closure does not this principle, but satisfaction of the importance in the UK, and in response diminish the scorn of those who rely greater good implies that the welfare to this the British Bankers’ Association on that service. of minorities will be compromised (BBA) initially announced that they The majority of banking in some way. would be phased out by 2018. organisations are commercial TGT Bank cannot come up with a However, the reaction from the public companies who are expected to perfect answer in deciding the most was so indignant that the BBA maximise profit in the interests of appropriate way forward. It can adopt reversed its decision. There is no their shareholders. The narrowest a utilitarian approach by withdrawing doubt that the use of cheques will view of this is the so-called cheque books and closing branches but continue to diminish (a 13% decline in ‘Friedman doctrine’, which suggests will be criticised or even vilified by 2015, and the usage of cheques that maximising profit should be those most profoundly affected by actually peaked as long ago as 1990) the only objective of a company. In these decisions. Or it can adopt a but older age groups (65 years and recent times, most companies now pluralist approach, perhaps by phased over) tend to regard them as the agree that there is merit in the withdrawals of services, in which case payment method of preference for notion of ‘enlightened shareholder the majority could argue they are gifts and charitable donations. In value’, in that the sustainable subsidising the minority. Ultimately, other words, cheques are dying but long-term prosperity of a company the bank must take decisions based on will not expire quietly. It is a uniquely is dependent on addressing multiple an honest view of how far the reach of British phenomenon: in many stakeholder obligations, including its fiduciary responsibility to the European countries, cheques never customers, employees, the various stakeholder groups extends. caught on as some societies moved community and others. The directly from cash-based systems to trouble is, it is impossible to fulfil Bob Souster is Module Director, Professional electronic payments without going all stakeholder claims Ethics, Chartered Banker MBA at Bangor through the considerable simultaneously. Consequently, it University. Share your views on Bob’s verdict inefficiencies of paper-based money is necessary to prioritise, or at about this ethical dilemma by joining the transmission systems. least balance these claims. Chartered Banker LinkedIn discussion forum.
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48 Chartered Banker The voice of financial professionalism to contents THE LAST WORD
Why work should be play
As an advertising agency, we often hear that we are different – envied, even – by the serious clients who believe our job is more play than work. We get paid to mess around with daft ideas, silly jokes and digital toys. But could big firms be more innovative if they were more like us?
o you know how the (Look at Pepsi’s recent disaster But as well as outsourcing wheel got invented? in which supermodel Kendall ideas, introducing more Neither do I, but my Jenner joins a tastefully diverse, creativity into the culture of theory is that it was non-specific protest march and large organisations can a toy, flint-carved defuses a potential conflict with accelerate innovation, build the Dfrom wood and bone to divert a the police armed only with a can firm’s intellectual capital and bored child by a handy dad in a of fizzy drink. Conceived in- help people feel more cave long ago. Only later did house at Pepsi, it was culturally stimulated and rewarded. In someone work out that it could and politically tone-deaf, created a world where even the largest be used to move Stonehenge. howls of dismay and was firms can be threatened by a Of course we’ll never know – withdrawn in a day at huge cost, startup with a new technology but if you look at the history both financial and reputational.) idea, it makes business sense of human invention, it’s at Agencies are an environment to encourage smart people least plausible. Steven where people are expected to inside the firm to let go a little Johnson’s recent book play around, to be creative. They more, take more time to mess Wonderland makes a strong build a knowledge base of what around with seemingly case that the cutting edge works, though working with pointless experimentation, of innovation lies wherever different clients and audiences, to have some more fun. people are working the which makes this play There are lots of ways of hardest to keep themselves productive. They offer their doing that – we try to work and others amused. clients deniability and fireability. with our clients in stimulating, But playing around – applying There is some irony in this creative ways even around knowledge of what motivates perception of agencies as fun, serious subjects. We’ve seen people to try different playful places to work, of innovation techniques that are combinations and find ideas course. Unlike our big corporate “Introducing often mocked as unserious – that will amuse, engage and clients, we are an independent, opera, Lego, mindfulness – more creativity persuade – doesn’t usually fit private company operating in a used to great effect by some into the into the dominant working competitive, oversupplied very serious (and very culture of large culture of, say, a bank. As a industry (partly because people successful) businesses. bank employee it’s far harder see it as a fun job) with organisations Like the invention of the to have the credibility or consequently tight margins. can accelerate wheel, it doesn’t really matter objectivity to push for what Which means, unlike a global innovation, how it actually happens; what’s might seem like a challenging bank, we have to be highly build the firm’s important is being open to the or unconventional idea. And efficient at channelling the intellectual potential of playing around. when an organisation does playful, creative side of what capital and help take it in-house and gets it we do into delivering value for people feel Ian Henderson is Chairman and wrong, there’s no agency to our clients. Or, like many before more stimulated Executive Creative Director of AML. blame or fire. us, we go out of business. and rewarded.” www.aml-group.com.
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50 Chartered Banker The voice of financial professionalism e-CC Toolkit
An ethics, culture and conduct toolkit; available to The e-CC Toolkit is part of a wide variety of CPD members and designed to enhance your understanding resources available to support members. To find out of professionalism and ethics in banking. more about CPD and membership of the Institute, email: [email protected] Learn at your own pace and access your e-CC Toolkit on the go, on any device, 24/7. To get started login to the members’ area of our website and visit My CPD.
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