More than a third of staff in Irish banks wanted to raise a concern at work over the past year, mainly relating to their company not acting in the best interests of customers or clients, according to the results of new industry-wide survey.
However, more than two in five of respondents who had concerns failed to speak up, with most fearing that it would either be held against them or that nothing would happen if their issues were raised.
Almost 60 per cent of 24,514 workers across the country's five retail banks – Bank of Ireland, AIB, Permanent TSB, Ulster Bank and KBC Bank Ireland – took part in the survey, which was carried out last October and published on Monday by the country's new Irish Banking Culture Board (IBCB) that aims to rebuild trust in the sector.
The five banks set out in late 2017 to establish the IBCB 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 Central Bank of Ireland subsequently published a report last June which found that top banking executives retained too much of a crisis-era “firefighting” mindset to place customers at the heart of all decisions, vowing to place banking culture at the heart of its supervisory regime. The Government is set to unveil legislation shortly to give the Central Bank powers to make senior bankers more accountable individually for failings or wrongdoing by their firms.
The IBCB's chairman, former Court of Appeal judge Mr Justice John Hedigan, who was appointed last December, said that banks "get it" that they have to change.
“After 42 years in law, I’m a sceptic. I’ve seen too many bad things and I’ve met a lot of chancers in my time,” Justice Hedigan told The Irish Times at the IBCB’s launch. “In the course of the last few months, I’ve met all the chief executives of the banks... Every one of them made it absolutely clear to me that they are totally committed to this.”
Mr Justice Hedigan said the findings on banking workers’ reluctance to speak up on their concerns were a “disturbing” element of the staff surveys and an immediate area that the board needs to work on with banks.
The report also revealed that 18 per cent of bank workers perceived a conflict between their company’s stated values and how business is done.
While 85 per cent said they saw colleagues “go the extra mile” for customers, and a similar level felt they were encouraged to provide clients with information to make right decisions, 19 per cent believe their bank does not put customers at the centre of business decisions.
Michael D’Arcy, Minister of State at the Department of Finance, told a room full of bankers at the IBCB event that they are on their “last chance” to restore public faith in the industry. The Minister said the tracker debacle had done “terrific damage” to the sector and that the insurance industry should also consider setting up a culture board.
“While not a substitute for effective regulation, assertive supervision and robust enforcement... the culture board has an important role to play in challenging industry on key issues,” said Derville Rowland, director general for financial conduct at the Central Bank.
Ms Rowland said banks’ responses to company-specific culture concerns the regulator had raised with companies last year “was a mixed picture”.
“Some plans were underdeveloped, some failed to assign action owners to actions, while others displayed insufficient evidence of board involvement,” she said.
“So let me be very clear that the Central Bank will closely monitor and challenge the banks on the delivery of their behaviour and culture plans in the period ahead. In the immediate term, we will expect to see significant developments by each bank in terms of behavioural and structural changes and the design of controls that will support a sustainable cultural change.”
The 14-person board comprises five senior members from the banks and nine non-bankers, including financial adviser Padraic Kissane, who has led a long-running campaign on the tracker-mortgage issue; Angela Black, chief executive of the Citizens Information Board; and Sue O’Neill, chair of the Small Firms Association.