Public ‘suspicion’ of Irish banks remains as staff see improvements

Minister plans to publish heads of Bill for senior accountability regime in July

Minister for Finance Paschal Donohoe: ‘The survey indicates that banks have missed an opportunity to make a positive difference during the pandemic.’ File photograph: Gareth Chaney/Collins

Minister for Finance Paschal Donohoe: ‘The survey indicates that banks have missed an opportunity to make a positive difference during the pandemic.’ File photograph: Gareth Chaney/Collins

 

The Irish public has lower trust in its banking system than consumers globally have of financial firms, according to a new survey. The findings come as a separate study shows bank workers in the State having seen improvements in the culture of their organisations in recent years.

The Irish Banking Culture Board (IBCB) said on Monday that the Irish banking sector received a net score of minus 28 in a public survey carried out earlier this year by consultancy firm Edelman.

This compares to a global average of plus 16 for banks globally under Edelman’s so-called trust barometer.

The survey found Irish consumers had a more positive view of their own bank than the wider industry.

“The survey indicates that banks have missed an opportunity to make a positive difference during the pandemic,” Minister for Finance Paschal Donohoe said at an online event hosted by the IBCB. “It tells us that trust in the Irish banking sector is low; that there is a need to bridge the gap between the everyday experience of banks and perceptions of the sector.”

Low trust

The Minister added: “It would seem that this low trust is driven more by underlying suspicion than it is on personal experience. This shows how much work lies ahead in dealing with perception and reputation.”

The second survey, conducted by employee engagement research firm Karian and Box of 10,648 bank workers, found that almost 60 per cent feel their organisation’s commitment to allowing staff to “speak up” on issues of concern has improved in the last couple of years.

Some 85 per cent of Irish bank workers said they feel their company does business ethically, nine percentage points ahead of the global norm, it said.

The report found the percentage of employees who believe their bank will follow through on customer commitments rose by 12 points to 75 per cent, compared with a similar survey in 2018 that was carried out ahead of the setting up of the IBCB in early 2019.

Positivity that no conflict exists between ways of doing business and stated values has risen 10 points to 66 per cent.

Scandal

The State’s five retail banks set out in late 2017 to establish the banking culture board as they were engulfed by the tracker-mortgage scandal and faced the prospect of politicians and regulators taking action to address culture issues in the banks.

The sector is set to shrink to just three banks, with Ulster Bank having said it is quitting the market, while KBC Bank Ireland is in talks to sell its loan book to Bank of Ireland.

IBCB’s chairman, former Court of Appeal judge Mr Justice John Hedigan, said his view on whether banks can improve their culture has moved from being “cautiously optimistic” when he took on the role to now being “positively optimistic”.

The main negative culture traits highlighted by bank staff included concerns that their organisations are bureaucratic, hierarchical and that staff are working long hours.

Some 53 per cent reported that, in the past six months, they have felt under constant strain at work, 10 points above the global norm and an area that IBCB chief executive Marion Kelly said the industry must address.

Similarly, only 57 per cent of Irish bank staff say they are proud to work in their company, 16 points below the global average.

Meanwhile, Mr Donohoe said he “hopes” to publish heads of Bill in July for a long-awaited senior executive accountability regime for the financial sector, which would make it easier to fine and disqualify senior managers for failings under their watch.