Co-operative Bank chief executive Barry Tootell says sales incentives for bank staff are “wrong” and has banned them in branches.
Speaking at a Co-op fringe event on banking at the Conservative conference in Birmingham today, Tootell said banks should focus on good customer service rather than short-term sales targets.
Last week, the bank banned incentives for selling products in branch and introduced an incentive system based on customer service. It will be rolled out to its call centres next year.
Some 3 per cent of Co-op branch staff were incentivised to sell and will now receive bonuses of up to £400 per quarter based on customer service performance, judged by mystery shoppers, independent experts and questionnaires.
Tootell said: “Frankly, if your business is about delivering excellent customer service then why would you incentivise selling?
“At banks a customer walks through the door and staff decide they are going to sell that customer a credit card whether they like it or not, because they have a target to sell credit cards that day. It is the wrong way for banks to approach it but that is what happens.”
Treasury select committee member Andrea Leadsom said it is tough to incentivise staff based on service.
She said: “Metro Bank also incentivises on customer service and it is struggling. The biggest culprit is free in-credit banking which is the biggest misnomer ever and the media has conspired in it.”
Leadsom said new banks must offer free banking to compete but need to sell credit to pay for the services, creating a “massive barrier” to entry.