Royal Bank of Scotland is to remove cash bonuses for 20,000 branch staff as the lender attempts to improve focus on customers.
The bank will scrap incentives for all customer-facing staff, including mortgage advisers and branch managers, and will instead increase their salaries by an average 5 per cent, the Financial Times reports.
The move, which will come into effect from the start of next year, “significantly decreases any likelihood of misselling in the future”, says RBS head of retail bank Les Matheson.
He says: “We’ve been in a place as an industry having incentives for at least a couple of decades. I think it does take time to acclimatise to all the other changes we’re making . . . but I think it’s a big step.”
In 2012 RBS stopped paying staff on the basis of product sales and decided to pay cash incentives on top of their basic pay.
However, Matheson says “having variable pay can still be a distraction” from focusing on customers.
He says: “What’s important is that when the customer talks to a mortgage adviser, or an insurance adviser for example, that they are confident in knowing the outcome of the discussion will not affect their compensation.”