“My assessment of recent history is that there has not been a case of a major prudential or conduct failing in a firm which did not have among its root causes a failure of culture as manifested in governance, remuneration, risk management or tone from the top.” Andrew Bailey, then Chief Executive, PRA
The way that financial firms behave has come under intense scrutiny over the last decade, and it’s now become clear that Culture in Finance really does matter.
But what is culture?
Culture probably best described as the ‘typical behaviours that characterise a firm’. In the words of Alison Cottrell, CEO of the Banking Standards Board, “A good culture is about more than ensuring good people don’t do bad things – it’s about enabling good people to do better things”.
When it comes to ‘good culture’ there is no such thing as a one-size-fits-all approach. But it’s true that good cultures often have a number of behaviours in common, which is why measuring and assessing culture has become increasingly important.
So how do financial firms measure culture?
To date, most financial firms have focused on asking employees how they perceive the culture of their firm, be it through internal or external surveys. The Banking Standards Board also carries out a comprehensive annual assessment which many of the UK’s banks take part in.
Since January we've been asking consumers to share their thoughts across a number of additional ‘culture’ questions and statements when leaving financial services reviews on Smart Money People, to help us better understand the culture of the firms they are dealing with. These are:
1. How would you describe this company in 3 words?
2. I was respected any my concerns dealt with thoughtfully
3. The staff members I dealt with are well trained and knowledgeable
4. I was dealt with in a truthful and honest way
5. My personal information is safe with this company
For the last four statements, consumers are presented with five options (strongly agree, agree, neutral, disagree, strongly disagree).
Our aim to to understand how consumers perceive the culture of firms across specific firms, but also how this varies by sector, for example, insurance vs. banking, or investments vs consumer credit. And most importantly, we’ll be able to track if the culture of financial firms is changing over time.
Introducing the Culture in Finance series
To ultimately help improve customer outcomes, we believe that measuring culture and showcasing best practice is key. We also want to identify firms and individuals who work hard to create good cultures, which ultimately help to improve customer outcomes and rebuild trust in our industry, so we've launched the Culture in Finance series to act as a platform for this work.
Find out more
To find out more about the Culture in Finance series please visit our microsite here. You’ll also be able to sign-up for updates.
If you’d like to contact the team to discuss Culture in Finance please click here.