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Don’t let this watchdog lose its bite

Bank sign with a crack in it

The banking industry needs to keep up the momentum on reforms – and the financial regulator must continue to put consumers first. Do you think enough is being done to change banking culture?

The banking watchdog has been baring its teeth over the past two years, and there’s evidence that parts of the industry have responded.

Our latest investigation into banks’ selling practices reveals signs of progress since we last looked behind the scenes, in 2012. There are still issues – targets have been rebranded as ‘outcomes’; some staff still say they know of colleagues who have mis-sold financial products – but there are positive signs in certain places.

Taming the financial industry

Change happens only if individuals make it happen. So the recent sudden departure of not one, but two consumer-focused industry leaders – Antony Jenkins from Barclays and Martin Wheatley from the watchdog, the Financial Conduct Authority (FCA) – causes me great concern.

Some people within the industry might view these two big scalps as a message that they’ve done enough to tackle mis-selling and can now just get on with the job. But it’s not enough; changing the culture will take far more work. The FCA has done much to tame the wilder side of the industry, and Which? has firmly supported its show of strength, including a robust line on mis-selling.

Cleaning up the banks

But in its latest report and guidance, the FCA cites intelligence that changes to reward structures haven’t always shifted the sales-focused culture. Instead, it says there are ‘indications that in some cases, the progress made on financial incentives may have led to an increase in pressure… on staff through other means to achieve sales’.

This echoes the findings of our investigation– much done on specifics, but plenty more still to do on culture.

The new chief executive of the FCA, when appointed, must carry on cleaning up the industry and not let the good work be undone. And the FCA must continue to speak out independently, otherwise consumer confidence in the regulator will be no better than the low levels of trust that consumers have in banks.


Banking is one of the most sheltered and protected industries that exists. No bank will ever be allowed to fail. It is almost impossible for any new entrants to serve the market unless it is a division cast off from an existing institution and given a new name and brand. Competing building societies have been devoured and destroyed. The capital reserves and other provisions needed to establish a new retail banking presence are – rightly – collossal. And the existing banks have a vast physical footprint [expressed in masonry and mahogany] across every high street in the land. Banks also enjoy the highest customer loyalty [or inertia] ratio in business for understandable reasons, in many cases since the alternatives are little different.

So in return for this rock-solid permanence we are entitled to the highest standards of banking performance, professional service, ethical behaviour, trustworthiness, responsibility and propriety. Sales cultures that suit the motor trader’s forecourt have no place in banking. I don’t want a return to the pompous formality of Mr Mainwaring and his obsequious clerks but the banks are not doing enough to promote responsible financial management by their own customers and at branch level are treating their customers like players in a bingo hall. Cut out the music and balloons and get back to responsible banking.

Who appoints the new CEO of the FCA? Will they check his teeth?

At the end I should have said “Will they check his or her teeth?”. It would good to have something completely different for once.

WE need the FCA to start looking at the scam that will be the contactless payment scheme and it’s follow on scheme to go cashless. In case it has passed people by, the banks are forcing everyone down this route so that they can have total control over our money. If we end up in the same sort of circumstances as Greece, we will be unable to get hold of cash because the banks will be able to totally control what we can get hold of. Equally dangerous is that should the banks decide to threaten government, for anything they aren’t happy with, they will be able to use a stop on contactless and cashless as means to get their own way. It is time that we stood up against the banks and get our lily-livered politicians to put the breaks on this out of control sector of our lives. Fanciful? You have been warned!