Bank staff ‘under pressure’ to mis-sell
Banks are still pressurising staff to sell products which may be unsuitable for customers, despite a number of mis-selling scandals, research from consumer group Which? finds.
A Which? survey conducted between October and the start of this month suggested that 65 per cent of bank staff are being placed under more pressure than ever to hit targets, and 46 per cent said they knew colleagues who had mis-sold products in order to meet their goals.
Which? Chief Executive Peter Vicary-Smith said: “Senior bankers say the culture is changing but this shows it just isn’t filtering through to staff on the front line who remain under real pressure to put sales before service, even after incentives are taken away.
“This proves the need for big change across the industry and for bankers to put customers first, not sales.”
The survey, with branch and call centre staff at HSBC, Royal Bank of Scotland, Lloyds Banking Group, Barclays and Santander, follows a series of banking scandals which have eroded public trust in the financial services markets.
The sales culture that has eroded the trust between the banks and their customers persists. John Walker, national chairman of the Federation of Small Businesses
At the top of the scandals is the mis-selling of payment protection insurance (PPI). Last year the banking industry dropped its legal complaint with consumers over the selling of PPI, leaving the banks with a compensation bill of billions of pounds. In November Lloyds Banking Group revealed its bill for PPI had topped £5bn.
The Which? survey involved interviewing 550 bank staff, of whom 371 had a sales role, of which 298 had sales targets to meet.
Of the staff who have a sales role, a third said they were uncomfortable with the amount of pressure that it put on them to push a product. Just six per cent of those who had been told to sell more said it was because it was in the customers’ best interests.
‘Disturbing’
John Walker, national chairman of the Federation of Small Businesses, said: “The Which? findings are disturbing. They suggest the sales culture that has eroded the trust between the banks and their customers persists.
“Many small firms have learned the hard way about the problems associated with being mis-sold products that are not appropriate for their business.
Selling people products they do not need is not putting the customer’s interests first and therefore is ultimately bad for the bank. BBA spokesman
“Thousands of firms have collapsed as a result of the mis-selling of complex financial products and many more are still waiting to get redress from the banks. This needs to be tackled as a matter of urgency, and for the interests of the banks to be fully aligned with their customers.”
A spokesman for the British Bankers’ Association (BBA) said that any incentives for front line staff are now based on clear criteria related to customer service.
He said: “Selling people products they do not need is not putting the customer’s interests first and therefore is ultimately bad for the bank.
“The banks will be looking at the findings of this small survey – along with their own internal research – to understand why any staff might feel otherwise.”
Act with integrity?
Which? plans to hand a dossier of evidence on the banking industry to the parliamentary commission on banking standards, the government, opposition MPs and the Financial Standards Authority (FSA).
It will include the bank staff survey as well as 120,000 signatures from people who support its “big change” campaign to make banks more consumer-focused and get badly behaved bankers “struck off”.
Changes to the way banks incentivise staff have begun to kick in. Following a previous announcement, Barclays has, from the start of the month, begun incentivising staff purely based on customer service.
A statement from HSBC said the bank encourages its employees to act “with integrity in the best interest of our customers”.
The statement said: “No one in the UK retail bank, not just customer facing staff, can earn a bonus without meeting the bank’s values and behaviours criteria.”
A spokeswoman for RBS said that its staff are rewarded on the basis of customer service and the performance of their branch overall. She said: “This is part of our move to make sure that customer service is the top priority for all of our staff.”