Are banks killing the hard-sell?
The Financial Conduct Authority are very please with themselves, saying that all the major banks on British high streets have made great improvements when it comes to the hard-sell, either replacing or substantially changing the financial incentive schemes which were the cause of mis-selling huge numbers of products.
A number of fines doled out to banks have been influential in changing their cultures - in December, Lloyds were hit with a £28million penalty by FCA after the bank were found to be pushing staff to hard, which resulted in the selling of unsuitable products to customers.
In the latest review, the FCA says that they have found significant improvements at many finance firms and they're going to keep at them, to ensure that the work they've done doesn't come unstuck and so that further improvements can be made.
Martin Wheatley, chief executive of the FCA said: "Eighteen months ago we gave the industry a wake-up call and it recognised that a poor incentive culture had helped push bad sales practice, which led to mis-selling. We’ve seen some good progress but it is going to take time to see whether the changes firms have made to incentive schemes and their controls stick, and whether good beginnings are part of genuine cultural change."
"Consumers can be assured that this remains an area that we will be watching closely to ensure poor practice doesn't return."
The FCA has identified the areas where banks can better manage incentive schemes, such as checking for increased trends in individual's sales patterns, or by doing more to correct poor sales behaviour in face-to-face conversations. Importantly, banks are advised that staff should be told that sales bonuses can also be affected negatively by mis-selling, so it isn't worth staff members simply trying to flog as much as possible without proper conduct.
The watchdog have also warned banks that they shouldn't replace bonus schemes with other performance management measures which put the same amount and type of pressure on staff. And, it seems to be working with a number of firms changing the way they sell. Barclays, for example, have stopped sales incentives altogether.
However, while the public are still receiving cold calls and emails from branches, there's still loads to be done. Could this possibly be the end of the hard-sell, or are the banks just playing nicely until the FCA leave them alone?