How we’re rising to “our greatest professional challenge”

Since taking the RBS helm in November 2008, STEPHEN HESTER has had one single-minded ambition: to steer the wounded bank through “relentless external hostility and controversy” and restore its pride as one of the world’s premier financial institutions.

In this exclusive interview with Chartered Banker, he explains his philosophy.

Hester on TRANSFORMATION
“It will be a very different bank”

I believe we can get to where we need to be by 2013. Our aspiration is that RBS should again be seen as one of the world's premier financial institutions, headquartered in Scotland, anchored in the UK and serving individual and institutional customers here and globally.

I am optimistic that we will rebuild RBS, that we will serve our customers very well and better than in the past. The “new RBS” will be a very different bank than before, in both what we do and the way we do it, and rightly so.

From a customer perspective, we hope that RBS’ reputation as an institution will be restored with credit earned for the way in which it was done. We hope that customers will feel a sense of continuity in service from the Bank during the period with visibility of service improvements along the way.

While each of our customers has different needs and requirements, we would like to feel that the excellent range of strongly customer-orientated products and services that we provide, coupled with our competitive pricing, means that they need never worry about entrusting us with their financial affairs.

Hester on MOTIVATION
“A new roadmap for our people”

I am acutely aware that our people have suffered – financially, in their job security, dented pride in RBS and from relentless external hostility and controversy.

I would like to be clear: they are doing a great job overall. Without their efforts, enthusiasm, dedication and resilience we would surely fail in our recovery mission.If we are to change, recover and to serve customers well, it will be because we can retain and motivate the excellent people we have across our organisation.

The key to restoring our people’s sense of pride and self-confidence is for them to work with us on the recovery plan we’ve laid out for the Bank and for it to be successful. This is something that is already underway as we need to ensure that our people buy into the new vision and roadmap for achieving this.

We need to make sure that, by empowering them to achieve this vision and regularly connecting the results of our actions with that vision, that pride and self-confidence return to accompany the recovery of the business.

Hester on PROFESSIONALISM
“Integrity, knowledge, behaviour”

I would say that banking is a profession and that, if we want to restore public confidence in the banks, then the high standards of integrity, knowledge and behaviours required to be a member of a profession will help us do that.  I do not see banking as requiring a blanket qualification for every role. There are a variety of roles within banking and, while qualifications help within many of them, they are not the only way to become proficient.

Nevertheless, while there is currently no such blanket statutory requirement in banking, the increased focus from the FSA on professional standards means that we would definitely encourage our staff, where it helps them do their job better, to work with banking professional bodies like CIOBS to gain a qualification to supplement the in-house training they receive to help them carry out their roles to a truly professional standard.

Hester on REPUTATION
“Public and media excoriation”

Throughout the last year, the reputation of banking and, by association bankers, has been subject to constant public and media excoriation. That has been difficult for staff working across the sector and in particular for our staff at RBS.   However, it is also an extremely interesting time to be working in a bank right now. I would encourage anyone at the start of their career, who is thinking about entering the sector, not to be put off by the external perception of the industry in the media. I believe there has never been a more exciting and challenging time to pursue a career in the banking sector.

At RBS our staff are rising to what is probably the greatest professional challenge they will ever face and it is crucial that we continue to attract new people into our organisation with the talent, ambition and vision to help us rebuild RBS into a strong and successful bank once again. 

Banking is an extremely broad profession with the rationale for entering it differing considerably across different roles. Nevertheless, in general, it is associated with many of the major events and most fundamental needs of our society. It is international and fast moving. It is generally meritocratic. It provides challenges and stretch of every kind. In fact, the crisis of the last year and the banking industry’s central role in the crisis and its solution, illustrate well many of these points.

Hester on CAREERS
“Opportunities for talented people”

Providing a career path with exciting opportunities for our people is key to attracting and retaining talented, motivated people. Giving them the opportunity to study for professional qualifications linked to an industry standard as they progress in their career can be an important component of this.

It also helps reassure our people and the public that there are high levels of technical knowledge and professional standards in UK banking and financial services. RBS Group has had a long-standing and productive relationship with the Chartered Institute of Bankers in Scotland; this is good for the bank, our staff and, I hope, the Institute itself.

Hester on MANAGEMENT
“Re-connect with the customer”

While criticisms of banking more generally are, of course, fair, these extend to elements of hubris and arrogance as well as the risk management mistakes that have been well documented. Nevertheless, it is fair to say that some of the criticism has been too narrowly directed and there are many parts of society that must share responsibility for the crisis we’ve had.

However, the lesson for banking is a very old and fundamental one that applies to many industries – reconnect with the customer, ensure the customer is well served and behave openly, honestly and with consistency. I think this process is happening and will continue to happen.

At RBS, we have changed the board and management team and are working hard to change the culture across the organisation. That takes time but we are on the job, working flat out and making solid progress. Our ambition is to become a new and very different bank to the one we were before the crisis.

Alongside the changes to management culture, we are also moving forward with a new humility and openness and with a recognition that we owe it to everyone to repay the support we have been privileged to receive.

We are also placing an emphasis on long term strategic thinking, empowerment and accountability of our people and a fundamental change to how we view risk, based on a realisation that our customer’s financial health and our own are interdependent.

It is clear that RBS and many other banks have sustained significant damage to our business and to our reputations. At RBS the lessons have been learned and they are influencing the shape of the business we will become once we have concluded our plan to restructure.

Hester on HUMAN CAPITAL
“Ethical, professional and technical focus”

Sustainable banks are built on solid foundations of both financial and human capital, and just as we need to rebuild our banks’ capital base, we need to rebuild our human capital too.

At RBS, we are committed to doing so by ensuring all our staff are focused on delivering value for customers and for local communities and demonstrating the high ethical, professional and technical standards the public rightly expect of us.

Working with the Chartered Institute of Bankers for Scotland, with their knowledge of the sector and their focus on making sure the qualifications they offer reflect the professional and ethical standards required within banking and financial services, helps our people to continually be developing and maintaining their knowledge.

As the bank refocuses on its core businesses, CIOBS can work with us to develop the specific skills our people will need to provide the highest levels of customer service that our customers want and deserve.

Hester on MEMORABLE ADVICE
“Prosperity v. adversity”

I think the words of William Hazlitt, the renowned literary critic and philosopher are particularly apposite. Amongst many other famous quotations, he said: “Prosperity is a great teacher; adversity is a greater one.”   “If we want to restore public confidence in the banks, then the high standards of integrity, knowledge and behaviours required as a member of a profession will help us do that.”

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