A survey by consumer group Which? has revealed that a significant proportion of bank sales staff still feel under pressure to achieve high sales volumes. Promotion of a ‘hard-sell’ culture by firms, remuneration systems that reward sales over good customer service and fears amongst staff of disciplinary action if they fail to meet their targets have all contributed to the banks’ widespread mis-selling of payment protection insurance, interest rate hedging products, investments, mortgages, packaged accounts and card protection insurance.
Which? contacted 383 staff from the five largest UK banking groups: Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, and Santander. The survey shows that 27% of bank staff feel under pressure as a result of a perceived sales culture within their firm. However, this is down from the 43% who felt this way when Which? carried out the survey back in 2012.
28% said they still feel under pressure to effect a sale even if it is not in the customer’s interests. This figure was 45% in 2012.
A more positive sign is that 78% believed their bank was now showing a greater commitment to customer service than was the case previously. 46% say the incentives offered by their employer for achieving high sales volumes have reduced in the past year.
The Daily Telegraph’s report on the survey is accompanied by a survey of its readers, asking whether they have noticed that banks are less keen to sell products to their customers. As of August 24 2015, 63% believe the banks ‘sell products just as hard as ever’.
So the findings indicate that some activities being carried out by banks today could give rise to compensation for mis-selling needing to be paid in the future.
Which? executive director Richard Lloyd commented on the survey results by saying:
“I’ve spoken to the chief executives of all the major banks, and at the top there has clearly been a recognition that it is bad for business to allow the kind of behaviour that has been so systemic in the past to continue.
“But that does not transform the organisation overnight. It is quite easy for middle managers or those further down the bank to simply rebrand sales targets and keep the pressure on staff up, which could result in mis-selling in other ways.”
He also commented that he was troubled by suggestions that regulatory chief Martin Wheatley had been removed from his post at the Financial Conduct Authority (FCA) because he was too tough on the banks for the Government’s liking.
Mr Lloyd added:
“It is a worrying position at the moment, there is still a long way to go and if the FCA takes the pressure off, we could quite easily see the situation slide back to what we found in 2012.
“We are realistic about the ability to stamp out mis-selling completely – there will never be a day when a middle manager will not put anyone under pressure to sell – but we need to see more changes to keep the culture improving and more pressure from the regulator to keep up the work they have already been doing.”
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