The 3rd Age of Banking Reform
At the end of September, I hosted the final roundtable focused on Purpose in Retail Banking. Our host this time was the FCA and an extremely good turnout meant that their boardroom was just about big enough to accommodate all my guests.
Despite there being an entirely different group of participants to the previous discussions, the concerns were consistent with those that came before:
- the importance of improving communication with customers,
- balancing commercial returns with a customer centric culture,
- access to relevant banking products and services.
We had a good and frank discussion before splitting into groups to work on addressing specific areas. During this, I was struck by the observation from one of the attendees that we were now in the third age of post crisis banking reform: that of ‘Strategic Purpose and Sustainability’ [the previous two being financial stability, financial conduct] – which rather than being remedial is current and forward looking. I observed that the timing of this conversation on purpose is indeed - timely; coinciding with the launch only days before of the UN Principles for Responsible Banking. Ostensibly about climate change, this initiative is about sustainable banking; responsible lending, financial inclusion, financial education and banking delivered in an inclusive way. All of these were touched on during this roundtable. But, unsurprisingly, our discussion led us to reflect that what is needed more than good intentions is a real commitment to deliver purposeful banking.
Throughout this session we looked at what gets in the way of purpose, with a view to identifying how various parties might overcome these barriers and what should be the focus or starting point. As I’ve mentioned above, improved communication will play a central role; staff with the ability to have real and honest conversations with their customers, to that end we might think about greater transparency as to where training investment is spent. But what was, for me, unique amongst this series of roundtables, was the emphasis placed on the pivotal role that can be played by Government in outlining what kind of sector Society wants. There were also some innovative suggestions for where to look for examples of best practice, such as the food and energy sectors, where they are proactive and responsive with regards to their approaches to differing clients and their differing needs.
I have been heartened by the extent of engagement in this series of roundtables: from retail bankers, many supportive stakeholders, consumers groups’ representatives and others – all have shown a commitment to building a purposeful retail banking sector.
In a sector, where there is an asymmetry of information in bias of the professional, we must consider how we tackle this, looking at how other professions have done this successfully. I will soon be reporting back to the FCA, feeding in for the final time to the cross-sector roundtable on my findings. But that isn’t the end of this journey for me and my team, and hopefully not for you either. In due course, we shall see the Discussion Paper from the FCA. We will be contributing a sector-specific essay on the “Purpose of Retail Banking” to form part of this. We will also be contributing a Chartered Body Alliance thematic essay, which will focus on the important contribution professionalism can make to strengthening purpose. I would encourage each and every one of you to take the time to read and engage with it when it is published in early 2020; either directly or via the Institute.