An overwhelming majority of consumers tell us there should be an independent code of conduct for bankers as we find fewer people think bankers act ethically now than immediately after the LIBOR scandal.
Despite announcements from banks that they are changing their culture, a Which? survey finds that only 6% of consumers think bankers act in their best interests now, compared to 9% in August 2012, immediately after the LIBOR scandal.
As the Parliamentary Commission into Banking Standards prepares its final report, nine in 10 people (93%) say that if bankers were struck off for wrongdoing this would increase their trust in the industry.
Banking is one of the professions that people are least likely to say act ethically – a mere 4% of people agree. Six in 10 (60%) people think it’s unlikely that bankers would lose their job if they lied or cheated, however the same percentage (60%) think it’s likely that nurses would lose their job. Our survey also finds that only one in ten (10%) of consumers say they trust the banking industry.
Which? has been calling for bankers to be required to comply with an independent code of conduct similar to the standards that doctors and lawyers must abide by. Nearly nine in 10 people (86%) think it is important that a banking code of conduct is compulsory, with a similarly high percentage (85%) who think it should have a basis in law. Eight in 10 people (78%) think it’s important that a code of conduct is created with input from consumers, and 80% think it should be applied at all levels of the industry.
Which? has been calling for a Big Change in banking to put customers first, not bankers.
Which? executive director, Richard Lloyd, said:
“It’s damning that fewer consumers think bankers act ethically now than they did immediately after last summer’s LIBOR rate rigging scandal, when we thought the reputation of banking had hit rock bottom. But since then we have continued to see senior bankers criticised for catastrophic failures, and not doing enough to turn around poor standards of basic customer service.
“An overwhelming majority of people support our call for a fully independent code of conduct for bankers, backed by statute, with tough sanctions for bad practice. We now need the Government, regulators and industry to redouble their efforts to rebuild trust and bring about a big change in banking.”
In order to increase their trust in banking, consumers told Which? they want to see:
- Stronger action against criminal behaviour (95%)
- Bonuses clawed back from individual bankers who act against customer interests (92%)
- Bankers struck off for wrongdoing (93%)
- An independent code of conduct outlining professional and ethical standards (89%).
Earlier this week an amendment to the Banking Reform Bill to introduce a code of conduct under the Approved Persons regime was defeated. The Government said it will wait for recommendations from the Parliamentary Commission on Banking Standards.
Which? believes any changes to improve professional standards or introduce a code of conduct within the pre-existing Approved Persons regime will not go far enough as this has been ineffective in tackling bad practice in the past. The regulator has not taken robust action under this scheme against individuals and executives by banning them from the financial services industry. We are concerned that this will be another example of tick-box regulation, and it excludes a large number of bankers, many of whom are in customer facing roles.
Instead, Which? is calling on the Banking Commission and the Government to establish an independent code of conduct for all bank staff, which is backed by statute to give it real teeth, is independent of the financial services industry, and contains genuine sanctions such as being barred from working in the industry.
Notes to editors:
1. Populus, on behalf of Which?, interviewed a representative sample of 2,059 GB adults online between 3 and 5 April 2013 and 2,060 GB adults online between 17 and 19 August 2012. Data were weighted to be demographically representative of all GB adults. Populus is a member of the British Polling Council and abides by its rules.
2. The professions we looked at were: Doctors, Nurses, Teachers, Engineers, Lawyers, Accountants, Civil Servants, Builders, Bankers, Estate Agents, Journalists, Politicians.
3. Over 130,000 people have pledged their support for ‘Big Change’ in banking with Which? and 38 Degrees. ‘Big Change’ is calling for:
- Bankers to put customers first, not sales.
- Bankers to meet professional standards and comply with a code of conduct.
- Bankers to be punished for mis-selling and bad practice.
4. Other key statistics include:
- Only 28% of people think the banking industry serves their needs well.
- Half of people (50%) don’t think the banking industry is taking steps to regain public trust.
- 72% believe the banking industry is poorly regulated.