Chartered Banker Professional Standards Board (CB:PSB

Chartered Banker Professional Standards Board (CB:PSB) Response to the
Banking Standards Review Consultation
March 2014
The Chartered Banker Professional Standards Board (CB:PSB) welcomes the opportunity
to respond to the Banking Standards Review consultation. The views expressed are
those of the CB:PSB and do not necessarily represent the views of individual CB:PSB
member banks who may be submitting their own responses.
The CB:PSB is a unique initiative to enhance and sustain professional and ethical
standards in banking in the UK. Its aim is to contribute to the restoration of public trust and
confidence in the banking industry and promote a culture of professionalism amongst
individual bankers. It is a voluntary initiative supported by eight leading banks1 in the UK
(encompassing some 350,000 individuals working in UK banking – 77% of the
approximately 450,000 individuals working in UK banking in total) and the Chartered
Banker Institute.
In October 2011, the CB:PSB published the Chartered Banker Code of Professional
Conduct which sets out the ethical and professional attitudes and behaviours expected of
bankers. Banks supporting the CB:PSB subscribe to the Code and have implemented
and embedded the Code’s principles in their organizations, independently monitored by
the Chartered Banker Institute.
The CB:PSB is developing and supporting the implementation of industry-wide
professional standards which set out the knowledge, skills, attitudes and behaviours
expected of all bankers. One way in which individuals can demonstrate that they have the
knowledge and skills to perform their role is through the achievement of vocational or
professional qualifications. In order to achieve a CB:PSB professional standard however,
individuals must also demonstrate that they continuously exhibit the customer focused,
ethical attitudes and behaviours set out in the Chartered Banker Code of Professional
Conduct, published by the CB:PSB.
73,000 individuals have met the first standard, the Foundation Standard for Professional
Bankers, and the CB:PSB board has committed that 200,000 staff (including all customer
facing employees) will meet it by the end of 2015. The second Professional Standard, the
Leadership Standard for Professional Bankers which will be launched in 2014 is currently
open for public consultation. Intermediate Standards (for specialist roles) will be
developed next.
The CB:PSB is supported by an Independent Advisory Panel comprising representatives
of banks’ retail, business and corporate customers, and other stakeholders.
1
Barclays PLC, Clydesdale and Yorkshire Banks, HSBC Bank plc, Lloyds Banking Group, The Royal
Bank of Scotland Group, Santander UK, Tesco Bank and Virgin Money.
Objective
Do you agree with the objective to establish a new independent organisation with the
Q1
aim of defining and raising standards of conduct and competence in banking?
We support the establishment of a new body to act as an independent champion for
better banking standards in the UK.
There is, we feel, some confusion within the paper on the proposed role of the new
body. Clarity will be essential if progress is to be made. We believe the new
independent organisation should:
 define and promulgate good practice for banks and the banking industry;
 work with individual banks to assess and encourage their progress in raising
the bar;
 make recommendations for further areas of improvement and provide
independent assessments of progress;
 act as a thought leader
This, together with the work being undertaken by the Chartered Banker
Professional Standards Board (CB:PSB), will we believe contribute to improved
customer outcomes.
We agree that membership should be voluntary. We would encourage the new
body to be flexible in its approach to ensure it is responsive to, and reflective of,
individual business needs and does not become bureaucratic. We accept that
comprehensive coverage is unlikely to be possible from day one, but it is vital if
success is to be achieved.
We do not agree with the proposal that the new body should define standards of
behaviour and competence for individuals or accredit banks’ training programmes.
This would duplicate work which has been underway for some time by the
Chartered Banker Professional Standards Board (CB:PSB) and the professional
bodies. Doing so would, we believe, create uncertainty and undermine
achievements to date.
Collective Action
Do you agree that there is a case for a collective approach calling for the
Q2
participation of all banks doing business in the UK?
We agree a collective approach is essential if the initiative is to play a part in
restoring trust and confidence in the industry. Given the sheer number of banks
and building societies operating in the UK we believe the new initiative should
commence its activity with a representative sample rather than waiting a critical
mass. Some flexibility will be required to reflect the differences in scale and product
range of banks and building societies operating in the UK.
The CB:PSB is a pioneer of collective action. Established in 2011 it encompasses
around 75% of all UK bank employees. Membership is open to all banks; however,
the uncertainty created whilst the Parliamentary Commission on Banking was sitting
has resulted in some banks maintaining a watching brief. During this time the
CB:PSB has continued to drive the development and implementation of standards.
The collective approach has been very successful:

CB:PSB member banks have developed and embedded a common Code of
Conduct;
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

more than 70,000 individuals have met the Foundation Standard for
Professional Banker and this figure will increase to 200,000 (including all
customer facing staff) by the end of 2015; and
the Exposure Draft of the Leadership Standard for Professional Bankers is
out for public consultation before being issued in final form in the Summer.
The CB:PSB reports on achievements publicly as a collective rather than on an
individual basis.
Role & Scope
Do you agree with the proposed role of the new organisation to set standards of
Q3
behaviour and competence for banks and building societies, and to define metrics
against which they could benchmark?
Q4
Do you agree with the proposed scope of the new organisation to include all British
banks and building societies, and foreign banks doing business in the UK?
We agree that the role of the new organisation should be to set standards of
behaviour and competence for banks and building societies and to define metrics
which would allow organisations to be benchmarked against peers.
We would encourage the new organisation to look at the metrics already being
used and identify how they might be incorporated into an overall benchmarking
framework. Transparency will be essential if trust and confidence in the industry is
to be rebuilt and careful consideration will need to be given as to the detail that is
published. The CB:PSB has developed and implemented metrics to benchmark
standards implementation which have been published in our annual reports and
dashboards. We would welcome the opportunity to work with the new body to
develop the overall framework.
We agree with the proposed scope.
Credibility
Q5
Do these proposals go far enough to ensure the body has credibility?
Overall we believe that the proposals should ensure credibility of the body in its
early stages. Ongoing credibility will depend on making a real difference and the
new organisation communicating in a way which resonates with the wider public.
We strongly support the proposal that the board will be independent and no more
than 12 people. We agree that bankers should always be in a minority but if
success is to be achieved the board must have credibility with the industry. We are
not convinced that appointing recently retired senior executives will ensure that the
board benefits from up to date knowledge across different sectors of the industry or
provide credibility with a wide range of stakeholders. We would encourage the
appointments panel to think of alternatives.
Accountability is critical and some have even suggested that the new body should
report to the Bank of England and the regulators on an annual basis with the
minutes of the meetings being made public. However, that seems as little likely as
having the body report to the banks themselves or another body. If the new entity
is set up as a public-service organisation, does it need to report anywhere in
particular, or is it simply accountable to the public? It is inevitable that the Chair
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and Chief Executive will be called from time to time to give evidence to the
Treasury Select Committee but this would be at the behest of the politicians and
should not form part of the new organisation’s formal governance structure.
Membership
Do you agree that the new body should initially work with banks and building
Q6
societies rather than individuals?
What are the pros and cons of aspiring to build individual membership over time?
We believe that the new body should work initially, and on an ongoing basis,
with banks and building societies rather than individuals.
Professional bodies with existing codes and standards provide membership
for individuals undertaking professional and vocational qualifications which
met stringent academic criteria. We see no merit in duplication of the work of
the professional bodies and we believe that would be incompatible with the
new body providing a canopy over the professional bodies. Rather than
enhancing the professionalism of the industry, extending membership to
individuals could dilute the value of a professional qualifications (many of
which are recognised globally) and professional body membership.
We have concerns about the statement that ‘sustainability of the new
organisation would always be in doubt if it was wholly dependent on the
goodwill of banks and building societies’. If the new organisation can
illustrate how it is contributing to rebuilding trust in the industry then we
believe its work and contribution would be welcomed by the banks. Should
this no longer be the case, the board would need to consider if its aims had
been met or if regulatory action is required.
This is a voluntary initiative, and we can see little benefit to individuals of
personal membership of a body which would not confer a recognized
professional designation, offer Continuous Professional Development or other
membership services.
Ethics
Q7
In the section titled ‘Ethics’, a case is made for a more pro-active approach to
managing ethical issues. Do you agree with this, and if so how should it be done?
It is the responsibility of each organization to promote and embed a strong ethical
culture in which staff are encouraged to raise concerns without fear of repercussions
or discrimination. The policy and committee structure each bank puts in place
should, subject to compliance with the FRC Corporate Governance Code, be at the
discretion of the individual organisation. However, we believe that the new
organisation, in conjunction with the regulator, should review current practice,
identify what excellence looks like, and set a standard to which the individual
organisations can be measured and rated against peers. We agree that the relevant
committee must be forward looking and not just focus on rectifying past errors. We
welcome the proposal that the new organisation will develop a whistle blowing
standard.
To proactively encourage ethical behaviours, the CB:PSB Code of Professional
Conduct is incorporated into the requirements of the CB:PSB’s Professional
Standards.
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Professional Standards
Do you agree with the proposal to build on best practice as set out in the Regulators’
Q8
guiding principles?
We agree that the new organisation should build on these principles to set out the
standards of good practice against which banks should measure their own
performance.
What would be the best way of assessing the implementation of a bank’s code of
Q9
conduct?
To be effective, codes of conduct need to be integrated into policy, procedures and
operations. Good practice already exists: CB:PSB members banks’ codes of
conduct have already been benchmarked, assessed and enhanced, where
necessary, to meet the requirements of the Chartered Banker Code of Professional
Conduct, which encompasses over 350,000 employees who work for our members.
We do not see the justification for the banks to register their codes with the new
organisation.
The Chartered Banker Institute assesses members’ subscription to the Code as
part of the annual independent review process. The rigour of this approach could
be enhanced further if, as part of the proposal that the new organisation act as a
canopy body (question11), it assessed and validated the work of the CB:PSB.
Q10
Do you agree with the agenda outlined in the ‘standard of competence’ section?
The proposal that the new body will define standards of competence or competency
standards for individuals would result in duplication of the work of a number of
existing bodies. We believe its role should be to set standards of behaviour and
competence for banks and building societies and to define metrics which would
allow organisations to be benchmarked against their peers.
Professional bodies such as the Chartered Banker Institute and CISI define
professional standards for individual members through the attainment of
professional or vocational qualifications, CPD activity and commitment to a code of
conduct.
In the banking industry one qualification cannot meet the requirements of the variety
of different roles and therefore the CB:PSB professional standards are defined
differently. The CB:PSB works with a panel of industry experts to develop
professional standards which are built on knowledge, skills and behavioural
requirements, we define the individual components which together make up
competencies, and an individual meeting these requirements would be deemed as
competent at a specific level, such as Foundation.
The CB:PSB has made significant progress in embedding the Foundation Standard
for Professional Bankers, (more than 70,000 to date and in excess of 200,000 in the
UK by the end of 2015). The CB:PSB Leadership Standard for Professional
Bankers is currently out for public consultation. Intermediate Standards for
specialist roles will be developed next.
We believe that the momentum built up since 2011 should be maintained and not
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stopped which is likely to be the case if there is a lack of clarity on the role of the
new organisation.
Q11
Would you support the proposed relationship with the existing professional bodies?
We strongly support the proposal that the new organisation provide a canopy
under which professional bodies would continue to operate, grow and compete.
We recommend that consideration be given to how the Financial Reporting
Council and the FCA Accredited Body Regime operate when drafting how this
would work in practice. We are firmly of the opinion that the new organisation
should:
 not compete with or duplicate the work of the professional bodies for
example in areas such as accreditation and membership; and
 not accredit or validate the training programmes of professional bodies.
In our opinion the new organisation will add the greatest value if it focuses on
assessing and validating the professional bodies themselves. Development and
award of a ‘kite mark’ to professional bodies should be given consideration.
Q12
Is the proposal for assessing in-house training sensible and practical?
Could the new organisation play a helpful role in the certification process?
We do not believe the role of the new body should be to validate banks’ internal
training programmes. This could result in extensive duplication of current activities
of the CB:PSB and the professional bodies.
The CB:PSB reviews learning outcomes for both in-house programmes and
programmes formally accredited by professional bodies to benchmark against the
requirements of the Foundation Standard. Any deficiencies are addressed by the
individual bank to support their employees in meeting the CB:PSB professional
standards.
The new organisation could make a real difference by identifying best practice and
developing a standard for banks on accreditation of internal training by an
appropriate body. If the new body also validates the overall approach individual
Institutes take, that would surely achieve the same goal in an efficient manner.
Benchmarking
Q13
Do you think a benchmarking exercise, to help banks identify areas for
improvement, would be of value?
Yes, we agree benchmarking would be of value. This must be easily
understandable for customers and stakeholders and not subject to continuous
change to ensure trends can be tracked.
The CB:PSB currently benchmarks the learning resources of its members against
the requirements of the Foundation Standard in addition to a range of metrics which
support the overarching aims of the CB:PSB.
Q14
Are the groups of metrics outlined in the section titled ‘Benchmarking’ the correct
ones? Would you propose others?
Yes – we believe culture, competence, development of the workforce and
outcomes for customers to be the correct categories.
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The CB:PSB currently benchmarks a range of metrics which support the
overarching aims of the CB:PB and cover four specific areas:




Q15
Public Confidence and Trust;
Industry and Public Awareness;
Professionalism; and
Professional Pride.
We recommend that the new organisation builds on/into its metrics framework our
measures and those published by other stakeholders and academics.
Would it make sense for banks to adopt a set of standard questions to add to their
existing staff surveys?
We believe this would be helpful and support benchmarking across the industry. It
would be important that questions were not changed frequently to ensure over time
trend data could be collated. It may also be helpful to incorporate standard
questions into exit interviews for individuals leaving organisations.
The CB:PSB with the support of YouGov currently surveys bank employees to
understand sentiment towards cultural change in the industry and in individual
organisations, their appetite for professional qualifications and membership and
their profession pride. Benchmarks have been collated over the last 18 months and
trend data will be available in 2014.
Q16
Is self-reporting appropriate? Might other methods deliver better results?
Self reporting is appropriate. Credibility would be enhanced,however, if the new
organisation monitors and assesses reporting and progress at institutional level.
Data gathered or validated by non bank sources should be used where possible to
monitor progress at industry level. For instance:
 the CB:PSB completes an annual review with the banks to confirm the
number of individuals meeting professional standards in banking;
 Professional institutions would be able to supply numbers gaining
professional qualifications; and
 FOS customer complaints upheld.
Discipline
Q17
Are there non-bureaucratic alternatives to the approach outlined in the section titled
‘discipline’ that might work better? Is there a role for kite- marking?
We agree that the role of the new body should be to identify and champion good
practice and not to be a disciplinary body. Responsibility for discipline lies with the
banks and the regulator.
We believe it is appropriate for the new body to exercise its influence by:
 seeking the commitment of banks to devise and implement a plan for raising
standards across the board;
 setting benchmarks against which individual banks can measure their
performance; and
 testing the robustness of the banks’ self reporting;
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The CB:PSB, which is already delivering tangible results, operates in this way:



The CB:PSB members’ Chairs/CEO’s, including from five of the six banks
which have commissioned the Banking Standards Review consultation,
personally signed the ‘Commitment to Professionalism’ committing their
organisations to embed the CB:PSB’s standards for individuals across their
respective banks. The CB:PSB members are responsible for disciplining
their employees who breach minimum standards of conduct and for reporting
them to the regulator if required.
The CB:PSB has set individual benchmarks for banks implementation of the
standards and reports on these to each bank’s main board via the relevant
CB:PSB Board member;
The Chartered Banker Institute conducts an annual independent review of
progress made by the member banks in embedding the Code of Conduct
and implementing the Professional Standards.
Given the proposed focus on customer outcomes, with which we agree, we question
the value of kite-marking for banks. Would customers be aware of the kite-mark and
understand its relevance and meaning?
Banking as a profession
Do you agree with the proposition that the new body should aim to become, in time,
Q18 a membership organisation for bankers to join?
This appears to us to conflict with the new organisation’s aim of becoming a canopy
body for the professional bodies. We consider it inappropriate for the new
organisation to act as both a canopy and a competitor. We are concerned that this
could undermine the existing professional bodies and dilute professionalism further.
It is difficult to see either the benefit to bankers of individual membership or the
value to consumers.
The new body could consider establishing a standard for and benchmarking staff
development through the achievement of an appropriate vocational or professional
qualification and membership of a professional institute. Many professional bodies
measure professionalism through a competence and development matrix as
detailed in research published by PARN in 2010 into Professional Standards
regulation.
Thought Leadership
Should the new organisation aspire to a role as a thought leader in banking, sharing
Q19 best practice and helping to propose solutions to challenges that arise in the future?
We agree the new organisation should aspire to a role as a thought leader.
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