The Banking Standards Board (BSB) commissioned research exploring the role of professional bodies and professional qualifications in the UK banking sector. The research involved desk-based research, online surveys and one-to-one interviews with a wide range of banks, building societies, banking and non-banking related professional bodies and other financial services stakeholders.
The research concluded that the potential exists for professional bodies to play a greater role in raising levels of competence and promoting ethical behaviour in the sector. The report also identifies five key cross-sector challenges that need to be addressed in order for this potential to be fulfilled, as follows:
The low profile of professional bodies within the banking sector currently: The general view across banks and building societies was that professional bodies, and in particular the qualifications on offer, have poor visibility and are poorly understood, and there is not a consistent view across the sector that professional bodies are playing a valuable role.
The need to establish banking qualifications, or a tiered framework of qualifications, which give (and are recognised to give) a thorough grounding in the fundamentals of banking: There was a broad consensus that qualifications in banking fundamentals (both on entry to the profession and at higher levels as responsibilities increase) would be valuable and desirable for employers, employees, regulators and wider society in delineating the core competencies required of a role in banking. However, there was an equally clear consensus among banks and building societies who were surveyed that such qualifications do not currently exist.
The fragmentation of the professional body sector, including fragmentation in qualifications and a lack of clear pathways and links to career progression within firms: There are over twenty bodies who provide a range of professional body services to the sector offering a plethora of qualifications. While there is relatively little overlap between them, banks and building societies find it hard to get a clear view on the range of qualifications available, the pathways between them and to judge their relative merits.
The relationship between banks / building societies and professional bodies, which is one of ‘customer and supplier’ rather than of partners forming a ‘community of interest’: The current relationship between banks / building societies and professional bodies drives an imbalance of power between the two parties in this relationship which potentially limits the professional bodies’ ability to act as genuine partner organisations to firms, providing both support and constructive challenge, particularly on issues of ethics.
The lack of a While it appears that the banks and building societies currently see banking professional bodies as primarily purveyors of qualifications, the professional bodies themselves reported that they would like to be valued for a broader range of activities. Despite this, there was a strong perception amongst respondents from banks and building societies that professional bodies do not contribute meaningfully to raising ethical and behavioural standards.recognised and clearly defined role for professional bodies beyond the provision of qualifications:
In 2016, the IDEA Centre produced a report on Professionalism in Banking for the Banking Standards Board. Based on extensive consultation with banks, building societies, professional bodies and other stakeholders through online surveys and semi-structured interviews, we addressed questions relating to the role of professional bodies in improving standards of competence and conduct in the banking sector.
Today’s report makes clear what needs to be done to strengthen professionalism in the sector. It will take collaboration and determination from all sides to tackle these challenges but the new accountability regimes present a unique opportunity for the industry and professional bodies to raise the bar on behaviour and improve outcomes for customers. We urge them to seize it.
Dame Colette Bowe, Chairman of the Banking Standards Board
What we were struck by during the course of our research was both the potential and the appetite of banks and building societies to work with the professional bodies to achieve positive change in levels of both technical competence and ethical behaviour. However, it is clear that the relationship between all parties needs to be redefined if this potential is to be realised.
Chris Megone, Professor of Inter-Disciplinary Applied Ethics and Director of the IDEA Centre
I welcome the work the BSB and the University of Leeds have done to lay out these challenges. At the end of the day, this is about continually improving the service we provide to clients and customers. It is in the whole industry’s interest to work more closely with the professional bodies to develop and retain the best people and aim for the highest standards of service.
Michael Cole-Fontayn, Executive Vice President and Chairman (EMEA), BNY Mellon
One way to make banks safer is to increase the role of professional standards. In the past, most bank employees were members of professional bodies. Today, very few are. This work, commissioned by the Banking Standards Board, is an important catalyst for increasing the role of professionalism in banking. Now the impetus is firmly on the professional bodies and financial institutions to foster a wider culture of professionalism within the industry. Professional bodies need to be more than just training providers and financial institutions need to take their public role as professionals seriously.
Andre Spicer, Professor of Organisational Behaviour at Cass Business School, City University London, and member of the BSB’s steering group on professionalism in banking
Publications and outputs
Professionalism in Banking Report - Dr Jim Baxter and Professor Christopher Megone, 2016
Dr Jim Baxter and Professor Christopher Megone presented their findings in a series of Professional Ethics Network events, in London and Edinburgh.