Skip to main content Skip to Footer

LATEST THINKING


Readiness and implementation of the banking standards review

The review presents the UK banking sector with an opportunity to regain the trust of its stakeholders.

Overview

In a 2014 Accenture survey, only 39 percent of customers in the United Kingdom (UK) felt banks are ethical, 51 percent thought they are fair and 52 percent trustworthy.

The banking industry needs to make a comeback and regain the trust of its customers, shareholders, regulators and government.

In this report, we discuss five themes identified from the Banking Standards Review that are vital to the success of the industry.

  • Leadership engagement

  • Organization alignment

  • Behavioral change

  • Competency development

  • Measurement of outcome

Banking standards represents a golden opportunity for the industry to get back ‘on the front foot’ by setting an industry-wide agenda for change. We explore the exciting opportunities the Banking Standards Review presents for the industry.

Learn more about Accenture Banking

Banking Standards Review: Readiness and Implementation
Learn more about the themes of success identified by Accenture from the Banking Standards Review that can help the banking industry regain stakeholder confidence.

 

View the Infographic: Banking Standards Readiness and Implementation [PDF, 399 KB]

PDF help

Background

The economic crisis and scandals across financial services have rocked trust and confidence in banks.

Though banks are taking steps to address this situation, these efforts are not widely recognized yet by customers, the public, government or regulators. This is unfortunate, but not surprising, as failures and misconduct issues continue to come to light.

Case for Banking Standards Review

The UK Parliamentary Commission on Banking Standards (PCBS) was appointed by the Government in 2012 to consider how culture and standards in the banking sector could be improved.

The PCBS proposed a professional standards body for banking. The Banking Standards Review was then commissioned and it sought widespread industry and public consultation on proposals for the new professional body.

The review found that regulation and rules alone won’t restore the industry’s integrity or reputation. Instead it calls for standards of excellence in behavior, decision-making, capability and individual responsibility. These would be applied across the entire industry, including retail, corporate and investment banking, building societies, foreign banks and newer niche providers.

Banking reforms: Why now?

Banking standards matter as financial services makes up 10 percent of UK’s GDP and employs one million people. A sustainable financial services sector is vital to the performance of the UK economy. Changing culture and rebuilding public trust will take many years, so this needs to start now.

Analysis

In high-risk industries, key business concerns transcend profitability, growth and competitive advantage.

Banks can draw valuable lessons from issues in other high-risk industries:

  • Product recall in the automobile industry: A large automotive manufacturer’s reform program in response to product recalls included introducing a global quality task force. This helped rebuild its reputation.

  • Supply chain crisis in the retail industry: A number of UK food retailers were hit by a supply chain crisis and mislabeling of food products. They realized that quality could not be outsourced.

  • Safety in the oil & gas industry: Following high profile oil spills and other safety incidents a large player in the natural resources sector has placed a huge focus on safety. They have also recognized the need to have a culture that emphasizes safety and quality.

Key lessons for the banking industry:

  • Take the opportunity to do things differently—failure creates impetus for change

  • Promote leaders who can make the difficult decisions with integrity under pressure

  • Listen, protect and encourage whistle-blowers and react quickly when issues arise

  • Champion values from the top and embed them in the business model

Recommendations

We examine five themes of success that can help the banking industry back on its feet to regain stakeholder confidence:

  • Engage your leadership team as role models
    Leaders have a direct responsibility for standards within their bank, as well influencing culture and behaviors at all levels.

  • Align your business model, organization, human resource and risk processes
    To embed higher standards of behavior and decision-making, leadership must create an environment that is conducive to business performance aligned with the new standards.

  • Align behaviors and decision-making to real-world standards
    Behavior changes need to take place at all levels within the bank, with a particular focus on frontline employees and middle management.

  • Build professional capability to underpin effective standards
    There is a clear intention that the Banking Standards Review Council will work with other bodies within the industry to raise professional standards. However, the review also makes it clear that the responsibility for raising capability remains with individual banks.

  • Use measurement to help raise standards and improve outcomes
    A key aspect of implementing the standards developed under the review will be measuring and reporting on three factors—culture, capability and customer.