A widespread “aggressive sales culture” was a major driver of failures within the banking that have cost over £38bn in fines and redress and will take “a generation” to unwind, a report has found.
The BBC reports the joint study from the Cass Business School and think tank New City Agenda estimates banks have paid out £38.5bn in fines and redress since 2000, £27bn of which relates to the payment protection insurance misselling scandal.
Between 2008 and 2014 there were 21 million complaints made to banks.
The report says “an aggressive sales mindset has been rewarded and reinforced across the industry for over a decade” and concludes that progress can only be made if banks drive change themselves, rather than simply reacting to regulation.
Conservative MP and New City Agenda co-founder David Davis says the “toxic culture which was decades in the making will take a generation to turn around”.
Archbishop of Canterbury and New City Agenda advisory board member Justin Welby says: “It is clear much more needs to be done by all stakeholders for trust to be restored in our financial institutions.”
Regulators need to closely track firms’ culture and investors and politicians must “maintain pressure on the banks” to change, the report recommends.
It also warns the Banking Standards Review Council must not become a “revolving door between banks and audit firms”.
Professor Andre Spicer of the Cass Business School says banks had already begun to change and smaller and challenger banks “are beginning to offer the customer real choice, and often have healthier cultures.
“Many culture-change initiatives are fragile, and their success is not ensured. It’s clear to us that much work still needs to be done.”
A British Bankers’ Association spokesperson told the BBC: “It’s very important that public confidence in this vital part of our economy returns, but that takes time and there is still more to be done.”