EXPLORING THE ROLE OF PROFESSIONAL BODIES …€¦ · 1 ... evidence about the role of...

J imBaxter andChr is Megone, Univers i ty of LeedsForewordbytheBankingStandards Board

EXPLORINGTHEROLEOFPROFESSIONALBODIESANDPROFESSIONALQUALIFICATIONSINTHEUK

BANKINGSECTOR

ii

iii

ABOUTTHEBANKINGSTANDARDSBOARD

TheBankingStandardsBoard(BSB)isanon-statutory,independentlyledbodyestablishedtohelptoraisestandardsofbehaviourandcompetenceacrosstheUKbankingsector.TheBSBitselfwillnotraisestandardsinbanking;onlybanksandbuildingsocietiesthemselvescandothis.TheBSBcanandwill,however,workwiththosefirmscommittedtoraisingstandardsandprovidetheimpartial,informedandindependentsupportandchallengethatwillhelpthemtoachieveresults.

TheBSBwaslaunchedinApril2015inthewakeofthereportfromtheParliamentaryCommissiononBankingStandards1,andopenedformembershipinJanuary2016.ItsmemberfirmsrangefromthelargestbanksintheUKtothesmallestbuildingsocietyandincludebranchesandsubsidiariesoffirmsheadquartered outside the UK, and their activities span the entirety of the banking sector. Bothbankingpractitionersandnon-practitionersfromoutsidethebankingsectorsitontheBSB’sBoard;non-practitionerscomprisethemajorityofBoardmembers. IfyouwouldliketoknowmoreabouttheBankingStandardsBoard,pleasesee:www.bankingstandardsboard.org.ukorcontactinfo@bankingstandardsboard.org.uk

©BankingStandardsBoard,October2016.Address:75KingWilliamStreet,LondonEC4N7BE|Tel:+44(0)2034409765|Website:www.bankingstandardsboard.org.uk

Allrightsreserved.Ifyouwanttoreproduceorredistributeanyofthematerialinthisreport,youshouldfirstgettheBankingStandardsBoard’spermissioninwriting.TheviewsexpressedinthisreportarethoseoftheauthorsandarenotnecessarilythoseofBankingStandardsBoard.

1http://www.parliament.uk/documents/banking-commission/Banking-final-report-vol-ii.pdf(PCBSVolumeII)

iv

CONTENTS

1 Summary........................................................................................................................................2

2 Introduction...................................................................................................................................3

2.1 Thecontextfortheresearch..................................................................................................3

2.2 Thedirectionoftheresearch.................................................................................................4

2.3 Researchoutline.....................................................................................................................5

2.4 Structure.................................................................................................................................5

2.5 Definitions..............................................................................................................................5

2.6 Professionalisminbanking.....................................................................................................6

3 Centralfindings............................................................................................................................12

3.1 Headlinefinding:Thepotentialexistsforprofessionalbodiestoplayasignificantroleinraisinglevelsofcompetenceandethicalbehaviourinthebankingsector.....................................12

3.2 Keyissuesforprofessionalbodiesinthebankingsector.....................................................15

3.2.1 Issue1:Thelowprofileofprofessionalbodieswithinthebankingsectorcurrently...15

3.2.2 Issue2:Theneedtoestablish‘goldstandard’statusamongbankingqualifications...16

3.2.3 Issue3:Thefragmentationoftheprofessionalbodysector,includingfragmentationinqualificationsandalackofclearpathwaysandlinkstocareerprogressionwithinfirms...........18

3.2.4 Issue4:Therelationshipbetweenbanksandprofessionalbodies,whichisoneof‘customerandsupplier’ratherthanofpartnersforminga‘communityofinterest’amongbankers 19

3.2.5 Issue5:Thelackofaclearlydefinedroleforprofessionalbodiesbeyondtheprovisionofqualifications............................................................................................................................20

3.3 Table1:Overviewofbanking-relatedprofessionalbodies.................................................23

3.4 Table2:Overviewofqualificationsprovidedbybanking-relatedprofessionalbodies.......30

4 Results..........................................................................................................................................37

4.1 Generalobservations...........................................................................................................37

4.1.1 Theprofileoftheprofessionalbodies..........................................................................37

4.1.2 Themissionandroleoftheprofessionalbody............................................................40

4.1.3 Thecultureofbankingandbanks................................................................................41

4.2 Professionalqualifications....................................................................................................42

4.2.1 Thevalueofprofessionalqualifications.......................................................................42

4.2.2 Thespecificbenefitsofhavingqualifications...............................................................45

4.2.3 Qualificationsandregulatorycompliance....................................................................49

4.2.4 Ageneralqualificationinbanking................................................................................50

4.2.5 Pathwaysandframeworks...........................................................................................56

4.2.6 Areasinwhichqualificationsarelacking......................................................................56

v

4.3 Professionalbodyactivitiesbeyondtheprovisionofqualifications....................................58

4.3.1 Overviewofservices.....................................................................................................58

4.3.2 Adviceandguidance.....................................................................................................60

4.3.3 Continuingprofessionaldevelopment(CPD)...............................................................61

4.3.4 Overseeingethicalstandards.......................................................................................62

4.3.5 Thoughtleadershipandnetwork-building...................................................................65

4.4 Theeffectivenessofprofessionalbodies.............................................................................66

4.4.1 Effectivenessindeliveringcompetenceand/orethicalbehaviour..............................66

4.4.2 Effectivenessincontributingpositivelytoorganisationalculture...............................72

4.4.3 Engagementwithfirms................................................................................................74

4.4.4 Fragmentationofthesectorandprospectsforgreatercoordination.........................75

4.5 ThefuturefortheprofessionalbodiesinbankingandtheroleoftheBSB.........................76

4.5.1 TheBSB.........................................................................................................................77

4.6 Professionalbodiesinbankingandacommunityofinterest..............................................80

5 Comparisonswithotherprofessions............................................................................................82

5.1 Results..................................................................................................................................82

5.1.1 Qualificationsandtraining...........................................................................................82

5.1.2 Activeinvolvementofmembers..................................................................................84

5.1.3 Overseeingethicalstandards,anddiscipline...............................................................85

5.1.4 ReportingandWhistleblowing.....................................................................................86

5.1.5 AdviceandGuidance....................................................................................................87

5.1.6 Thoughtleadership.......................................................................................................88

5.1.7 Themissionofaprofessionalbody..............................................................................88

5.1.8 Engagementwithemployers........................................................................................89

5.2 Modelsfromotherprofessionsthatmayserveforcomparison..........................................89

5.2.1 The‘engineering’model...............................................................................................89

5.2.2 The‘hospital’model.....................................................................................................91

5.3 Achievingacommunityofsharedinterests.........................................................................92

5.3.1 Summary......................................................................................................................94

5.4 Tablesofcomparisonsbetweenprofessions.......................................................................96

5.4.1 Table3:Otherprofessions–Keybodiesandroutetoqualification............................96

5.4.2 Table4:Otherprofessions–Continuingprofessionaldevelopmentandoverseeingethicalstandards..........................................................................................................................99

5.4.3 Table5:Otherprofessions–Advice,guidanceandthoughtleadership....................101

6 Bibliography...............................................................................................................................103

AppendixA:Methodology.................................................................................................................105

vi

A.1 Generalapproach...............................................................................................................105

A.2 Deskresearch.....................................................................................................................107

A.2.1 MaterialssuppliedbytheBankingStandardsBoard......................................................107

A.2.2 Publishedmaterialsfromprofessionalbodies...............................................................108

A.2.3 Documentsfromsearches..............................................................................................108

A.3 Onlinesurvey......................................................................................................................109

A.4 Interviews...........................................................................................................................110

vii

ABOUTTHEAUTHORS

TheresearchsummarisedinthisreportwascarriedoutandthereportwrittenbyJimBaxterandChrisMegone.JimBaxteristheProfessionalEthicsDevelopmentOfficerattheInter-DisciplinaryEthicsApplied(IDEA)CentrebasedattheUniversityofLeeds.LeadingtheIDEACentre’sKnowledgeTransferactivities,Jimhasprovidedethicalreviewandconsultancyservicesforarangeoforganisations,anddevelopedandruntrainingandcontinuingprofessionaldevelopmentwithprofessionalbodies.Hisresearchinterestsincludeprofessionalandbusinessethics,ethicaldecisionmakingandmoralresponsibility.ChrisMegoneisProfessorofInter-DisciplinaryAppliedEthicsattheUniversityofLeedsandDirectoroftheIDEACentre.Christeachesancientphilosophyandanumberofareasofappliedethicsincludingbusinessethics,medicalethics,andethicsindentistry.Hisresearchisfocusedonmedicalethics,businessandprofessionalethics,moralpsychologyandAristotelianethics.Hehasworkedonthedevelopmentofworkinprofessionalethicswithanumberofprofessionalbodiesinengineering,lawandfinanceandisamemberoftheethicscommitteeoftheRoyalAcademyofEngineering.

ACKNOWLEDGEMENTS

Theworkandexpertiseofanumberofpeoplewentintoshapingtheresearch,andthesecontributionsaregratefullyacknowledged,withparticularthankstoElizabethEllisandKateSkellington-Orr.Theresearchmethodologyandresultswerereviewedatseveralpointsbyasteeringgroup,whichincludedProfessorAndreSpicerofCassBusinessSchoolandAlisonCottrell,MikaelDownandHelenReeveMorrisoftheBankingStandardsBoard.Finally,wewouldliketothankallofthosewhocontributedtothisresearchthroughsurveysandinterviews(andwhosupportedthisworkbyhelpingfitmeetingsandinterviewsintodiaries);wearegratefultoallwhotookpartfortheirgenerositywiththeirtimeandtheiropen,frankandinsightfulcontributions.

viii

FOREWORDBYTHEBANKINGSTANDARDSBOARD

Thequestionofwhetherbankingisaprofession,anumberofprofessionsorneitherofthese,canbedebatedatlength.Thateveryonewhoworksinbankingshouldbehave‘professionally’inthesenseofdemonstratinghighstandardsofbehaviourandcompetenceis,however,ratherlesscontentious,andself-evidentfromthepointofviewofcustomersandclients.

ThereportoftheParliamentaryCommissiononBankingStandards(PCBS)‘Changingbankingforgood’2foundin2013thatanapparentlackofconstraintsonbehaviourofindividualsworkinginbankinghadcontributedsubstantiallytothefailureswitnessedinthefinancialcrisis.Ithighlightedtheneedtostrengthenindividualaccountabilityacrossthesector,pavingthewayfortheintroductionoftheIndividualAccountabilityRegimes3inMarch2016.ThePCBSalsonoted,however,thatregulatorychangeinisolationwouldbeinsufficient,andthatmoreneededtobedonetoimproveprofessionalstandardsandcultureacrossthesector.Itconcludedthat,whiletheindustrydidnothave‘acrediblesetofprofessionalbodies’4thesebodiescouldplayacrucialroleinadvocating‘astrongdutyoftrust,bothtowardsclientsandtowardsupholdingthereputationoftheprofessionasawhole’5.

FortheBankingStandardsBoard(BSB)–notitselfaprofessionalbody,butestablishedtohelpraisestandardsofbehaviourandcompetenceacrosstheUKbankingsector–thequestionofwhetherandhowqualificationsand/orprofessionalbodiescouldplayastrongerroleininstillingprofessionalismacrosstheUKbankingsectorisofobviousinterest.

Inlate2015,theBSB,therefore,commissionedsomeindependentresearchfromtheInter-DisciplinaryEthicsApplied(IDEA)centreattheUniversityofLeeds.Thisresearchaimedto:

• examinethecurrentuseandperceptionofprofessionalbodiesandqualificationsinbanking,andexplorewhethereitherwerechanginginthelightofregulatorydevelopments,orwouldchangeifthequalificationsperceivedtobeonofferwereanydifferent;

• setouthowprofessionalbodiesinthebankingsectoroperate,andhowthiscompareswithothersectors;and

• explorewhether,fromtheperspectiveofbothfirmsandprofessionalbodies,therewouldbevalueinprofessionalbodiestakingonawiderrangeofroles(again,drawingonexperienceinothersectors).

Thereis,ofcourse,moretodemonstratinghighstandardsofbehaviourandcompetencethanhavingaqualificationorbeingamemberofaprofessionalbody;andwhilethisresearchfocusesonprofessionalbodiesinthesenseofmembershiporganisationsopentoindividualsinbanking,therearealsoanumberofbodiesinthebankingsectorthatprovidetraining(bothtechnicalandethical)butwouldnotthinkoforpresentthemselvesasprofessionalbodiesassuch.Likewise,therearea

2http://www.parliament.uk/documents/banking-commission/Banking-final-report-vol-ii.pdf(PCBSVolumeII)3TheIndividualAccountabilityRegimes(ofwhichtheSeniorManagersRegime,CertificationRegimeandConductRulesformpart)wereintroducedfollowingchangessetoutintheBankingReformAct2013toreplacetheapprovedperson’sregime,basedonthePCBS’recommendationstoimproveprofessionalstandardsandculturewithintheUKbankingindustry.Forfurtherdetails,see:https://www.the-fca.org.uk/improving-individual-accountabilityorhttp://www.bankofengland.co.uk/pra/Pages/supervision/strengtheningacc/default.aspx4PCBSVolumeII,para1305PCBSVolumeII,para135

ix

numberoforganisationsthateitherdefinebehaviouralstandards,provideexamplesofgoodpracticeand/orotherwiseinfluencethebehaviourorcompetenceofthoseworkinginbankingsuchastheCharteredBanker:ProfessionalStandardsBoard,FICCMarketStandardsBoard,regulators,tradebodiesandinvestors.

Anystepstakentoexplorethefutureroleofprofessionalbodiesmustclearlytakeintoaccountthiswidercontext;andwhiletheyhavenotbeenthefocusofthisresearch,theviewsofanumberofthesetrainingprovidersandotherorganisationsactiveinthisareahavehelpedinformit.

ThereportwhichfollowsprovidesasubstantialbodyofevidenceabouttheroleofprofessionalbodiesandprofessionalqualificationsinUKbanking;drawingtogethertheviewsoffirms,professionalbodiesandtheseotherrelevantandkeystakeholders.Theheadlinefindingisthatthepotentialexistsforprofessionalbodiestoplayasignificantroleinraisinglevelsofcompetenceandethicalbehaviourinthesector.Tofulfilthispotential,thereportidentifiesfivecross-sectorchallengesthatwillneedtobeaddressed.

TheintroductionoftheIndividualAccountabilityRegimesmakesthesechallengesperhapsevenmoresalientandpressing.Insomeotherjurisdictions6andindustries7,theprofessionalstandardsexpectedofrelevantindividualsaresetbyanexternalbody–oftenaprofessionalbodyand/orregulatorybody.IntheUKbankingindustry,andundertheCertificationRegime,nosuchexplicitroleisallocatedtoexternalbodiesandjudgementaboutwhetherornotrelevantindividualsare‘fitandproper’toperformtheirrolerestswithbanksandbuildingsocieties.Asapproachestocomplyingwiththeseregimesareembeddedwithinfirms,thereisthepotentialforprofessionalbodiestocontributesignificantlytoraisingstandardsofbehaviourandcompetenceacrossthesectortherebyenhancingfirms’abilitiestonotonlycomplywiththeregimebutfortheregimetoachievemaximumbenefitacrossthesector.

Theresearchidentifies,however,anumberoffactorsthatmaypreventthishappening.Oneisthedifficultyinjudgingthequalityofthewealthofdifferentbankingqualifications;anotheristhelackofclearpathwaysandlinksbetweenqualificationstocareerprogressionwithinfirms;athirdistheabsenceofqualifications(oratieredframeworkofqualifications)thatgivearecognisedandthoroughgroundinginthefundamentalsofbanking.Theresearchindicates,inalloftheseareas,potentialbenefitsforfirms,professionalbodiesandotherrelevantstakeholdersinworkingtogethertodeveloppragmatic,sector-wide(oracrossrelevantpartsofthesector)solutions.

Qualifications,however,arejustoneaspectoftherolethatprofessionalbodiescouldpotentiallyplayincontributingtohigherstandardsofbehaviourandcompetenceinbanking.Insightsobtainedbylookingattherolesofprofessionalbodiesinothersectorsmakesitclearthatissuesofprofessionalisminotherindustriesareaddressedmorecomprehensively,withamoreholisticapproach–incorporatingdifferentaspectsandrolesfortheprofessionalbodiesinquestion.Whiletheapproachthatisappropriateinoneindustrymaynotbenecessarilydirectlytransferabletoanother,thiscross-sectoralworkcangiveusefulexamplesofhowprofessionalbodiescancontributefurthertohigherstandardsofbehaviourandcompetence,andcansuggestideasastohowthismight–ormightnot–beappliedinbanking.

6SuchastheFinancialPlanningEducationCouncilinAustraliahttp://fpa.com.au/education/financial-planning-education-council-fpec/ortheInstituteofBankingandFinanceinSingaporehttps://www.ibf.org.sg/Pages/Home.aspx7Suchasmedicine,accounting,lawandengineering.

x

Professionalbodiesoperatinginbankingarecognisantofsomeoftheissueshighlightedaboveandsomeareundertakingworktoaddressthem.Suchactionsmay,however,beconstrainedbyissuesofcapacityandcoverage.Thesectorishugelyvariedinsize–rangingfromunder4,000memberstoover150,000globally–andoftenfocussedonaveryspecificsegmentofthediversebankingsectorthattheyhavesuccessfullycarvedout,withlittleoverlapfromotherbodies.Theramificationsofthiscanbefoundinallofthechallengeshighlightedbytheresearch;initiativesbyanindividualprofessionalbodyare,forexample,unlikelytohaveasignificantimpactbeyondthatprofessionalbody’smarketsegment,meaningthatcross-sectoralissuesmaybeexacerbatedandopportunitiesmissed.

Collaboration,coordinationand,wherepossible,simplification,therefore,wouldappeartobethekeyingredientsforsuccessinensuringthatprofessionalbodiescanplayasfullaroleaspossibleinraisingstandardsacrossthesector.Alsocrucial,however,isthatanychangeswillrequirethestrongengagementandsupportofboththeprofessionalbodiesthemselvesandthebanksandbuildingsocietieswhosestaffare(ormightbe)theirmembers.

TheresearchundertakenbytheUniversityofLeedsindicatesaninterestandwillingnessonthepartofbothfirmsandprofessionalbodiesinthesectortoexplorewhatmoremightbedonetostrengthenprofessionalisminthesector;inparticular,inthecontextofqualificationsandtheroleofprofessionalbodies.

Tohelpfacilitateconcretestepsinthisdirection,theBSBproposestoestablishasector-wideworkinggroupearlyin2017.ThisworkinggroupwillincludeBSBmemberfirms,professionalbodiesinthebankingsector,othertraining/qualificationprovidersandsubjectmatterexperts.Itwillexplorehowthechallengesidentifiedinthisresearchcanmosteffectivelyandpragmaticallybeaddressed,workinginthiscontextwithotherbodieswithaninterestinthisarea,andwilldevelopproposalsforbroaderconsultation.

Ifyouwouldbeinterestedinbeinginvolvedinthiswork,pleasegetintouchwithus(ideally,by16November2016)[email protected]

Inter-Disciplinary Ethics Applied (IDEA) Centre FACULTY OF ARTS, HUMANITIES AND CULTURES

Exploring the role of professional bodies and professional qualifications in the UK banking sector

2

1 SummaryTheresearchsetoutinthisreportexploredwhetherandhowtheroleofprofessionalbodiescouldbestrengthenedinordertopromotehigherstandardsofbehaviourandcompetenceacrosstheindustry.Thisresearchaimedtobuildanevidencebase(withrespecttobothfirms’useofqualifications,andviewsontheroleofprofessionalbodies)toinformpotentialnextsteps.Arangeofviewsweresoughtfromanumberofsources,includingadesk-basedreviewofexistingmaterials,responsestoanonlinesurvey,and53interviewswithindividualsfrombanks,buildingsocieties,professionalbodies(bothwithinandoutsideofbanking)andotherkeystakeholders.

Theheadlinefindingisthatthepotentialexistsforprofessionalbodiestoplayasignificantroleinraisinglevelsofcompetenceandethicalbehaviourinthesector.

Thereare,however,fivekeycross-sectorchallengesthatneedtobeaddressedifthispotentialistobefulfilled:

1. Thelowprofileofprofessionalbodieswithinthebankingsectorcurrently:Thegeneralviewacrossbanksandbuildingsocietieswasthatprofessionalbodies,andinparticularthequalificationsonoffer,havepoorvisibilityandarepoorlyunderstood,andthereisnotaconsistentviewacrossthesectorthatprofessionalbodiesareplayingavaluablerole.

2. Theneedtoestablishbankingqualifications,oratieredframeworkofqualifications,whichgive(andarerecognisedtogive)athoroughgroundinginthefundamentalsofbanking:Therewasabroadconsensusthatqualificationsinbankingfundamentals(bothonentrytotheprofessionandathigherlevelsasresponsibilitiesincrease)wouldbevaluableanddesirableforemployers,employees,regulatorsandwidersocietyindelineatingthecorecompetenciesrequiredofaroleinbanking.However,therewasanequallyclearconsensusamongbanksandbuildingsocietieswhoweresurveyedthatsuchqualificationsdonotcurrentlyexist.

3. Thefragmentationoftheprofessionalbodysector,includingfragmentationinqualificationsandalackofclearpathwaysandlinkstocareerprogressionwithinfirms:Thereareovertwentybodieswhoprovidearangeofprofessionalbodyservicestothesector,offeringaplethoraofqualifications.Whilethereisrelativelylittleoverlapbetweenthem,banksandbuildingsocietiesfindithardtogetaclearviewontherangeofqualificationsavailable,thepathwaysbetweenthemandtojudgetheirrelativemerits.

4. Therelationshipbetweenbanks/buildingsocietiesandprofessionalbodies,whichisoneof‘customerandsupplier’ratherthanofpartnersforminga‘communityofinterest’:Thecurrentrelationshipbetweenbanks/buildingsocietiesandprofessionalbodiesdrivesanimbalanceofpowerbetweenthetwopartiesinthisrelationship,whichpotentiallylimitstheprofessionalbodies’abilitytoactasgenuinepartnerorganisationstofirms,providingbothsupportandconstructivechallenge,particularlyonissuesofethics.

5. Thelackofarecognisedandclearlydefinedroleforprofessionalbodiesbeyondtheprovisionofqualifications:Whileitappearsthatthebanksandbuildingsocietiescurrentlyseebankingprofessionalbodiesasprimarilypurveyorsofqualifications,theprofessionalbodiesthemselvesreportedthattheywouldliketobevaluedforabroaderrangeofactivities.Despitethis,therewasastrongperceptionamongstrespondentsfrombanksandbuildingsocietiesthatprofessionalbodiesdonotcontributemeaningfullytoraisingethicalandbehaviouralstandards.

3

2 IntroductionThisreporthasbeenpreparedbytheInter-DisciplinaryEthicsApplied(IDEA)CentreattheUniversityofLeeds.ItsummarisestheresultsofaresearchprojectthatwascarriedoutbetweenNovember2015andMay2016,inpartnershipwiththeBankingStandardsBoard.

Inthisintroductionwewillsetoutfirstthecontextforthisspecificpieceofadditionalresearch,andthegeneraldirectionindicatedbythefindingsofthatresearch.Thenwewillbrieflyoutlinethemethodologicalnatureoftheresearchandsetoutthegeneralstructureofthereport.

2.1 ThecontextfortheresearchFollowingthefinancialcrisisof2008-9,andtheperceivedroleofthebanksandbuildingsocieties8asatleastoneofthecentralpartiestothatcrisis,theParliamentaryCommissiononBankingStandards(PCBS)in2013-14,andthenSirRichardLambert’sBankingStandardsReviewin2014,consideredwhatmightbedonetoaddresssomeoftheissuesintheindustrythathadcontributedtotheirfailingsinthecrisis.

OneresultofthesedeliberationswasthesettingupoftheBankingStandardsBoard,witharemittopromotehighstandardsofbehaviourandcompetenceacrosstheUKbankingindustry.ThecurrentresearchaimstoinformthatactivitybyexploringinmoredetailsomesuggestionsmadeinthePCBSandLambertreportsastohowstandardsmightberaised,inparticularapossibleroleforprofessionalisationaswellasregulation.

Ontheregulatorysideagooddealofthoughtandenergyhasbeendevotedtoputtinginplacearevisedregulatoryframeworkfortheindustry.However,theregulatorshavethemselvesrecognisedthelimitsofregulationinaddressingmattersofculturewithinthebankingsector.Asoneofourinterviewees(fromafirm)putit:‘Upuntilnowtheyhavebeenpolicing…….whichisarolethatwasprobablyrequiredgiventhat….we’dgoneofftherails.[Sowehave]beendisciplinedandbrought

backinagain.ThesignsthatI’mnowseeingfrommyinteractionwithsomeoftheregulators,[are]

thatthey’re…startingtoshiftabit[towardsprofessionalisation]whichis,“youknowwhat,wecan’t

policeyouonabsolutelyeverysinglepersonforeveryminuteofeveryday.That’syourjob,

organisation.”’

Atthesametime,evidencetothePCBS,andthentoLambert,frombothbanks/buildingsocietiesandprofessionalbodies,hadsuggestedapossiblerolefortheprofessionalbodies,asonewaytosupplementthecontributionofregulation.

ThustheCertificationRegime(CR)hasnowputinplaceanenvironmentthatmightbeacatalystforapositivechangeinlevelsofbothtechnicalcompetenceandethicalbehaviour.And,inlinewiththesesuggestionsinPCBSandLambert,thismayrepresentanopportunityforprofessionalbodiestomakeacontribution.However,thereisariskthatthisopportunitycouldbemissedifitisnottakenupintherightway.

8Asthetitleindicatesthefocusofthisreportisonprofessionalismacrossthebankingsector,andtheterminologyofthereportoftenrefersexplicitlytobothbanksandbuildingsocieties.Howeverwhereverforstylisticreasonsonly‘bank’or‘banking’isusedthewholesectoristobeunderstoodunlessthereisanexplicitdistinctiondrawnatthatpointbetweenthetwopartsofthesector.

4

InthecontextofboththePCBSandLambertreportsandnowtheactionofregulators,ourresearchaimstotakeastepbackinthinkingabouthow(orif)professionalbodiescouldstepuptoproducebetteroutcomesforbanksandbuildingsocieties,andtheindividualsemployedbythem.

2.2 ThedirectionoftheresearchTheresearchconfirmsthatprofessionalbodieswanttoplayagreaterroleinthesector.Italsoindicatesthatbanksandbuildingsocietieswouldwelcomethemdoingso.Theindustryrecognisesthatthereareissuesthatneedaddressinganditcanseethateffectiveprofessionalbodiesmighthavearoleinaddressingthem.However,theresearchalsoshowsthatthefirmsperceivethatthereexistseveralbarrierstoaneffectiveinterventionbyprofessionalbodies,andsomeoftheseperceptionsareendorsedbytheprofessionalbodiesthemselves.Thesebarriersincludeahighdegreeoffragmentationamongsttheprofessionalbodies,alowprofileforthebankingprofessionalbodies,andagreateremphasisbyprofessionalbodiesontechnicalcompetencethanonmattersofethicsandculture.AndpartlyforthesereasonsthefirmsdonotseetheprofessionalbodiesasprovidinghelpfulsupportwithregardtoaddressingthedemandsoftheCertificationRegime.

Inthelightofthesebarriersthereisasignificantriskthatthecurrentopportunitymaybemissedifthereisonlyunilateralactionbyindividualprofessionalbodies,witheachbodypushingout‘products’withoutsufficientthoughttotheoutcomesthesectorwouldwant.Theriskhereisthatthiswillonlyincreasefragmentationandclutterinwhatisanalreadyclutteredspace,compoundingtheindustry’sdissatisfactionwithwhatprofessionalbodiescanoffer.

Theidentificationofthesebarriersandassociatedrisksjustifiesaneedtoexamineapotentialcoordinatedresponsefromtheprofessionalbodysector.Inparticular,whatmaybeneededfrombankingprofessionalbodies,atleastintheeyesoftheindustry,isamoredevelopedandambitiousvisionoftheirroles,especiallyintermsofhowtheycancontributetoenhancingtheethicsandcultureofthefirmsinwhichtheirprofessionalmemberswork.Indevelopingsuchavisionourresearchpointstothevalueofcomparisonswithprofessionsinothersectorswhichcanprovidepointerstowardsinstancesofgoodpractice.

Oneparticularissuemaybethatfromthefirms’pointofviewitisnotmorequalificationsbutgold-standardqualificationsthatareneeded.Herethereisa‘chickenandegg’problem:professionalbodiesneedtoimprovetheirqualificationsto‘goldstandard’togetbuy-infromtheindustry,butoneoftherequirementsforqualificationstohavegoldstandardstatusisthattheybetakenseriouslybythefirms.Itmightbethatthereisarolehereforanumbrella/canopybodytohelpovercomethis‘chickenandegg’problem.Thiscouldinvolvethecanopybodyhelpingtocoordinatetheactivitiesoftheprofessionalbodies,andsetexternalstandardsforthemtoachieve,whilstsimultaneouslypromotingthosebodies(suitablyaccredited)totheindustry.Theinterviewswithbothfirmsandprofessionalbodieslentsupporttothisidea.

Onthisviewoftheroleofprofessionalbodiesinprofessionalisation,thecanopybodycouldactwithbothprofessionalbodiesandfirmstoaddresssomeofthebarriersnotedabove.Itcouldhelptobringaboutcoordinationratherthanfragmentation,contributetoqualitycontrol(possiblyinvolvingsomeauditingroleaswell),andnudgebothfirmsandprofessionalbodiesintomoreeffectiveinteraction.

5

2.3 ResearchoutlineInverybroadoutline,theresearchhadthreestages:

Aninitial,desk-basedresearchstage:asurveyofrelevantliteratureaimedatgaininganunderstandingofthestateofplaywithregardtoprofessionalisminbankingandatdefiningthebackgroundagainstwhichthefurthertwostagesoftheresearchwouldtakeplace.

Anonlinesurveystage,takinginbothfirmsandbanking-relatedprofessionalbodies,aimedatidentifyingbroadtrendsintheirviews.

Aninterviewstage,takinginmorein-depthviewsfrom(a)banksandbuildingsocieties,(b)banking-relatedprofessionalbodies,(c)non-banking-relatedprofessionalbodiesand(d)otherimportantstakeholdersinthefinancialservicessector.

ThemethodologiesforthethreestagesaresetoutinAppendixA.Resultsfromthesethreedistinctstagesarepresentedalongsideeachotherinthemainbodyofthereportforeaseofinterpretation.Wehavepulledoutasetofcentralfindings–aheadlinefindingandfivekeyissues–whichwethinkrepresentthemostimportantthemesarisingfromtheresearch.

2.4 StructureInwhatfollowswebeginbyprovidingsomedefinitions,forthepurposesofthisreport,ofkeytermsrelatedtoprofessionsandprofessionalism.Wethensetoutthereport’sheadlinefindingandidentifyfivekeyissuesthatneedtobeaddressedinrelationtothatheadlinefinding.Inthefollowingsectionwesetoutthedetailedresultsoftheresearch,whicharepresentedthematically--firstwithrespecttoviewsfromthefirmsandthebankingprofessionalbodiesandthenwithrespecttotheresultsfromourinterviewswithnon-bankingprofessionalbodies.Inevitablytherearesomeoverlapsbetweenthethemes,butwehaveendeavouredtocross-referwherequotesarebeingusedintwocontexts.

Followingthislattersection,weoutlinetwomodels(fromotherprofessions)fortherelationbetweenprofessionsandthesectorinwhichtheyoperate,thecanopymodelandthehospitalmodel.Wealsodrawontheresultsfromnon-bankingprofessionalbodiestodevelopthenotionofaprofessionalbodyasacommunityofinterest,whichmayalsobeofuseinenvisagingtheengagementofbankingprofessionalbodieswiththeirindustry.Finally,weprovideabriefsummaryconclusion.

2.5 DefinitionsInordertoresolvepotentialambiguitiesinthewaysomeofthecentralideasintheresearcharedescribed,itwillbeusefultosetoutsomedefinitionsofkeyterms,astheywillbeusedinthisreportandintheresearchgenerally.

TheEnglishword‘professionalism’carriesconsiderableambiguityandcanbeunderstoodinseveralsenses(seethenextsectionforadiscussionofsomeofthese).Thefocusofthisresearchisnotprimarilyonwhetherbankingis,orshouldbe,‘aprofession’,butratherontheextenttowhichthevariousstructures,institutionsandattitudesthatcharacterisetheestablishedprofessionsareinplace,whethertheycouldbeputinplace,andwhateffectthismighthave.Inordertoavoidambiguity,wehaveusedtheterm‘professionalisation’torefertothestateofthesestructures,institutionsandattitudesbeinginplace,andtotheprocessofputtingtheminplace.

Professionalstandardsincorporatebothethicalstandardsandstandardsof(technical)competence.Ethicalconsiderationsapplytostandardsofcompetence,becauseclientsandthe

6

publichavearighttoexpectthatprofessionalsadheretostandardsofcompetenceaswellastoethicalstandards.However,wetakeethicalstandardstobedistinctfromstandardsof(technical)competence.

Secondly,therearealsoambiguitiesaroundtheuseoftheword‘standards’,andwehaveappliedthefollowingdefinitionsinordertoavoidtheseambiguitiesasfaraspossible.

Ethicalstandardsaretheethicalnormsapplyingtothebehaviourofprofessionals,includingsuchconsiderationsasthepropertreatmentofclients,thepublicinterest,honesty,integrity,confidentiality,responsibilityandsoon.

Standardsofcompetencearethenormswhichapplytothetechnicalknowledgeandskillpossessedbytheprofessional.

Whenreferringtothecompetenceorethicalbehaviourthatiscurrentlytobefoundinthesector,asdistinctfromthenormsthatapplytothatcompetenceorethicalbehaviour,wehaveusedthetermslevelsofcompetenceandlevelsofethicalbehaviour.

Finally,ourresearchtookinalargenumberofprofessionalbodiesandinordertomakesenseoftheresultsitwasnecessarytoplacethemintocategories,accordingtotheextenttowhichtheyareinvolvedinandfocusedonthebankingsector.Wehaveusedthefollowingtermstorefertothesecategories:

Bankingprofessionalbodiesarethosebodies,eitherallofwhosemembers,orthegreatmajorityofwhosemembers,workinthebankingsector.

Banking-relatedprofessionalbodiesarethosebodieswhichhavesignificantnumbersofmembersworkinginthebankingsector.Thiscategoryincludesthebankingprofessionalbodies,butalsoincludesanumberofbodies,onlyaminorityofwhosemembersworkinbanking,butwherethisminoritystillrepresentsasignificantportionoftheirmembership.

Non-bankingrelatedprofessionalbodiesarethosebodieswitheithernomembersinbanking,oronlyaverysmallminority.Theyareincludedinthisresearchnotbecauseofanyinvolvementtheymayhaveinthebankingsector,butforthepurposesofprovidinginsightsintootherprofessionsasacomparisonfromwhichlessonsmightbelearnedandappliedinbanking.

2.6 ProfessionalisminbankingTheclaimthat‘professionalisminbankinghasbeenindeclineintheUK’couldbeinterpretedinanumberofdifferentways,becausetheword‘professionalism’inEnglishhasanumberofrelatedbutdistinctmeanings.Arelativelysimplesenseofprofessionalismistheoneweareemployingwhenwetalkofsomeone‘doingaprofessionaljob’or‘actingprofessionally’.Really,anyoneengagedinanykindofworkcouldbedescribedasbeingprofessionalinthissenseand,conversely,couldbeaccusedofbeingunprofessional.A‘professional’plumber,takeninthissense,turnsupontime,takesprideinthequalityofthework,doesnottrytochargemorethanisreasonable,andtidiesupwhenthejobisdone.Anunprofessionalactordoesnotlearnhislines,ormisseshisentrancebecauseheisinthetheatrebar.‘Beingprofessional’,inthissense,isessentiallyamatterofdoingthejobwell,ofnotfallingshortofthebasicstandardsthatareexpectedofsomeonedoingthatjob.

Asecondsenseofprofessionalismgoesbeyondthis,byidentifyingoneofanumberofspheresofpaidactivitythatarequalitativelydifferentfromordinaryjobs.Thesespheresofactivityarecharacterisedbyanumberofdifferentaspectsoftheworkitself,oftheknowledgeandskillsrequiredtodothejob,andoftherelationshipsinvolved.Classically,professionalworkinthissenseinvolvesarelationshipbetweenaprofessionalandaclient,whichischaracterisedbyanasymmetry

7

ofknowledgeandunderstandingbetweenthetwoparties,apotentialfortheworktohaveaprofoundimpactonthewellbeingoftheclient(andperhapsalsoonthewiderpublic)andacorrespondingneedfortheclient(andthepublic)toplaceahighdegreeoftrustintheprofessional.Peoplewhoseethemselvesasprofessionalinthissensewillhaveasenseofresponsibilitytotheirclientswhichgoesbeyondthatinvolvedinamerelytransactionalrelationship,requiringthattheprofessionalactinthebestinterestsoftheclient,andshowsensitivitytootherethicalnormswhichthenatureoftherolemakesparticularlypertinent.Theywillalso,ideally,haveasenseofawiderresponsibilitytothepublicinterest,bornofanunderstandingofthesocialpurposeoftheirwork.

Athirdsenseofprofessionalismappliestoareasofworkwhich,becausetheyhavethecharacteristicsnotedabove,havecertainstructuresinplaceinordertobetterservethepublicinterestandjustifythepublic’strust.Thecentralorganisationinsuchprofessionsistheprofessionalbody.Thisbodyusuallyhassomeroleinregulatingtheprofession-thoughtheremayalsobeaseparateregulatorybody-byoverseeingacodeofethicsanddiscipliningthosewhobreachthecode.Theywillalsohavearoleinsettingthecriteriaforentrytotheprofession(forexamplethroughoverseeingoraccreditingprofessionalqualifications),settingrequirementsforprofessionalstokeeptheirknowledgeandskillsuptodatethroughcontinuingprofessionaldevelopment(CPD),oftenprovidingadviceandguidanceontechnicalandmorebroadlyprofessionalmatters,andplayingathoughtleadershiprole,speakingonbehalfoftheprofessionandarticulatingwhatisatthecuttingedgeofthinkingontechnicalandmorebroadlyprofessionalissues.

Ithasbecomeawidelyheldviewthatprofessionalisminthebankingsector,atleastinthesecondandthirdsensesabove,andperhapsalsointhefirst,hasbeenindeclineforsometime.IntheirsubmissiontotheParliamentaryCommissiononBankingStandards,theIFSSchoolofFinancenotedthat:

Untiltheendofthe1980stherewasanimportantunderstandingthatifsomebodywasseriousaboutacareerinabank,he/shewouldhaveto‘dotheirbankingexams’.[...]Takeupoftraditionalbankingqualificationshasslumpedinthelast20+years.9

Manyofourparticipantsexpressedsimilarviews,andnotedthechangethattheyhadwitnessedasthebankingsectormovedfromacultureinwhichpossessionofabankingqualificationwasthenormtooneinwhichitwastheexception:

ThereusedtobesomethingcalledtheCharteredInstituteofBanking[sic]onLombardStreet

andyouhadtogettoanassociatelevelwithinthefirstfewyearsofyourcareertobeableto

standahopeofactuallybecomingabankeranddoingwhatbankersdo.AndIthinkthat

initialthreetofour-yearperiodwhereyouhadtositexams…infundamentalareasthat

franklyyououghttounderstandbeforeyoudoanysortofbanking…Ithinkmaybethe

bankingindustrylostitssenseofpurposeandtookitseyeofftheballinthat…Idon’tthink

thatearlystagerecognitionofwhatyouhadtodotoqualifytobecalledabanker[hasbeen

as]prevalentinperhapsthelastfifteentotwentyyears.Andthat’sarealshame.

Anintervieweefromabankorbuildingsocietymadeasimilarcomment:

Ithinkit’sprobablyfairtosayifwegobacktowhenIjoinedtheindustry26-27yearsago,it

wasexpectedtoactuallydoyourbankingexamsifyouwantedacareer.Ifyoujustwantedto

comeinanddoagoodjob,andgohomeat5o’clock,thenit’sfine,butifyouactually

wantedtogotooperationsandmanagement,thenitisexpected.

9PCBSVol.2,p.295.

8

Anotherintervieweefromabankorbuildingsocietyexplained:

Thatwasthethingyoudid.Ifyouwantedtoprogressupthemanagementstructureyouhad

togetthatprofessionalqualification.Isuspectthatstartedtodisappearprobablyinthe

early-tomid-nineties.Itbecamelessandlessimportantforpeopletohavethatprofessional

qualificationanddisappearedIguesscertainlybytheendoftheninetieswhenitjustwasn’t

anissuethatpeopletalkedabout.Therewerethreeprincipalreasonsthathappenedinmy

mind.Thefirstwasthatbuildingsocietieswereaping[copying]thebanks.Theythoughtthat

wastheroutetosuccess…aswesawwithanumberofexamplesitwasn’tnecessarily.Banks

seemtothinkthatyoudon’tneedtobeprofessionallyqualifiedtomakelotsofmoneyand

sellthingstopeople.Itallbecameaboutsales…andgrowthandprofitetc.

Theinterviewee’sthirdreason,whichalsoreflectedtheviewofsomeotherinterviewees,washis/herperceptionthatsomeprofessionalbodieshadmovedawayfromafocusonprovidingprofessionalqualificationsto“sellingproducts”.

TheCharteredBankerInstituteinitssubmissiontotheLambertreport10likewiselistedanumberofexplanationsforthedeclineintheprofileoftheprofessionalbodies,includingageneralchangeinbankingculturefromstewardshiptosales;increasingcareerspecialism,whichhasresultedinfewergeneralistbankerswithall-roundexperience;greateruseoftechnology,whichhasreducedthedemand(thougharguablynottheneed)forprofessionaljudgment;andthesearchforcostefficiencies,forexamplebyoutsourcingactivitieslinkedtocustomerserviceandoutcomes.Thereisalsoawidespreadperception(exemplifiedbytheinterviewquotationabove)thatbankers’abilitytorecogniseandrespondtoethicalissuesastheyarisehasalsobeenindecline.Thismaybeaneffectofthedeclineinprofessionalisation(lackingthepropertrainingandmembershipofaprofessionalbody,bankerslackasenseofthemselvesasprofessionalsandhencelackethicalawareness)oracause(thesenseofbankingasanethicalpracticehasdeclined,andinterestinprofessionalbodieshasdeclinedasaresult)orboth.

AparticularlyillustrativeexampleofthelinkbetweenprofessionalisationandethicalbehaviouristhatofPaymentProtectionInsurance(PPI)mis-selling.PPImis-sellingwasneitherintheclient’sinterestnorinthepublicinterest.Thosedirectlyinvolvedinthepracticewereoftendoingsoinresponsetoverychallengingsalestargetswhichwouldhavebeendifficultifnotimpossibletoachievewithoutmis-selling,buttheyhadnocountervailingincentivewhichmighthavepromptedthemtoputonthebrakes.Moreover,thePCBSreport’sanalysisofthePPIscandal11suggeststhatseniorfiguresinbankswere‘indenial’aboutboththeextentandtheunacceptabilityofmis-selling.Iftheyareeffective,professionalbodiescanmakeethicalresponsibilitiessalienttotheirmembersinawaythattheywouldnotbeiflefttotheirowndevices.OnemajorargumentinfavourofprofessionalismisthatscandalssuchasPPImighthavebeenmitigatedorevenpreventedifthoseinvolvedhadbeensubjecttoprofessionalrequirements,hadreceivedprofessionaltraining(asopposedto‘salesandcompliancetraining’12)andhadthoughtoftheirdutiesintermsofstewardshipratherthansales.

10Lambert(2014),p.23.11ParliamentaryCommissiononBankingStandards(2013),pp.88-95.12InternationalAcademyofRetailBanking(2014),p.2.

9

Thestoryofdeclinenotedabovemightappeartopaintasomewhatdepressingpictureaboutprofessionalisminbanking.However,thismustbesetagainstasenseofgrowingmomentumaroundtheideathatprofessionalisationrepresentsanimportantmeansbywhichlevelsofcompetenceandethicalbehaviourmightberaisedinthebankingsector.ThismomentumwasnotedintheParliamentaryCommissionreport,whichconcludedthat,‘Poorstandardsinbankingandthepublic’sresponsetothemhavegeneratedanimpetuswithinthebankingindustrytomakeproposalsforprofessionalbankingstandards,’andthat,‘thisimpetusiswelcomeandmustbeharnessed.’13

13PCBS(2013)p.306

Whatisaprofession?

Anareaofworkknownasa‘profession’typicallyhassomeorallofthefollowingcharacteristics:

1. specialisedskillsandknowledge

2. acentralrelationshipbetweentheprofessionalandtheclient,includingaresponsibilityfortheprofessionaltoactintheclient’sbestinterests

3. anasymmetryofknowledgebetweentheprofessionalandtheclient

4. thepotentialforsignificantimpactuponindividualclientsand/orwidersociety

5. acrucialrolefortrustfrombothclientsandthepublic,andthereforeaneedfortheprofessionaltojustifythattrust

6. asocialpurpose,oftenexpressedinpartintermsofadutytoactinthepublicinterest

7. aperiodoftrainingandstudyrequiredtoentertheprofession,whichisthenongoing

8. somedegreeofself-regulationbyaprofessionalbodywhichsetstechnicalandethicalstandardsandoverseesmembers’adherencetothem

9. acodeofethics

10. identificationbyaprotectedterm(e.g.doctor,barrister)

Thereisanongoingdebateaboutwhetherbankingshouldproperlybeconsideredaprofession,anditisoutsidethescopeofthisprojecttoanswerthisquestion.However,oftheabovecharacteristics,some(e.g.1,4,5)clearlyapplytobanking,oratleasttosometypesofbanking,some(e.g.10)donotapplytobanking,andsomemaycertainlyapplytosomeaspectsofbanking,ifnotall(e.g.2and3).Inmostoftheothercasesitisperhapsatleastanopenquestionwhethertheyshouldapply.

Points1-6areaspectsofthenatureofthework,whereaspoints7-10arefactsaboutthewayaprofessionisstructuredandregulatedasaresultof,orinresponseto,thenatureofthework.Withoutseekingtoanswerthequestionofwhetherbankingisaprofession,itcouldbeaskedwhethersomeorallofthestructuralandregulatorypointswouldbejustifiedbythosepointsaboutthenatureoftheworkwhichdoapply.Ifso,thenprofessionalisationinsomeorallofthesewaysislikelytobeafruitfulapproachinbanking.

10

Theviewthatprofessionalismisanimportantdriverofbothcompetenceandculture,andeventhatitmaybethekeytorestoringstandardsinthebankingsector,iswidespreadbothwithinandoutsidethesector.ThisviewwasexpressedstronglybytheInstituteforCharteredAccountantsinEnglandandWales(ICAEW)intheirsubmissiontotheParliamentaryCommissiononBankingStandardsundertheheading‘bankingmustbecomemorelikeaprofession’:

Webelievethattheprofessionalmodelisneededtorestorepublictrustinbankingandisarealisticambition,butthatbankinghasbecomemoreaggressivelycommercialandasaresult,professionalismhasbeeneroded.Theprofessionalmodelrecognisesthatthereisapublicinterestinhighstandardsofcompetenceandbehaviourincertainactivities,particularlythoseinvolvingservicesbasedonspecialistexpertise.Althoughbankinghasnotbeenseenasaprofessionforsometime,itsharesthesecharacteristics.Furthermore,itshouldbeintheenlightenedself-interestofprofessionstostriveforthehigheststandards,becausethatleadstobetterlong-termdecisionsandmoresustainablebusinessesduetobettercustomersatisfactionevenifitreducesshorttermprofitability.Toachievethisinbankingwillrequirecollectiveaction.14

Ourinterviewswithnon-bankingprofessionalbodieswerealsocharacterisedbyenthusiasmforthe‘professionalmodel’anditscapacitytoraiselevelsofethicalbehaviourinbanking.SeveralintervieweesexpressedinterestintheworkoftheBankingStandardsBoard(BSB)inthisregardandadesiretobekeptinvolvedinthefuture,shouldtheBSBdecidethatprofessionalisationisthewaytogo.Furthermore,theUK’sprofessionalbodysectorcontainsahugeresourceofintellectualcapitalandexperience(notlimitedtothosebodiesweinterviewedaspartofthisresearch),onwhichtheBSBcandraw.Theintervieweesfrombanking-relatedprofessionalbodies,fortheirpart,wereawarethatprofessionalismandtheprofessionsareonthegovernmentalandregulatoryagenda,andshowedakeeninterestintheworkoftheBankingStandardsBoardinthisregard.Oneofourintervieweesfromabankingprofessionalbodystatedthattheirprofessionalbodywasmovingfrombeingatrainingprovidertobeingaprofessionalbodyinthefullestsense:

Intheearlyyearswewerepredominantlyanorganisationthatawardedqualificationsand

training.Butbecauseofchangesintheindustry,thefocusverymuchmoreonongoing

learningandCPDandsoon,we’vechangedverymuch.Weanticipatethatourmembership

willprobablytripleorquadrupleinthenextyear.

Abankorbuildingsocietyintervieweecommented:

Ithinkifit[thebanking/buildingsocietysector]doesn’tnow[suggestagreaterrolefor

professionalbodies]itneverwill,afterwhat’sbeengoingoninthelastfewyears.

Itwillbeinterestingtoseewhethertheseandotherpredictionsofincreasedprofessionalisationinthebankingsectorarefulfilled.Theredoesappeartobeacertainmomentumcurrently.However,withoutconcertedactiontosustainandcapitaliseonthismomentum,itisunlikelytolastindefinitely.

TheresearchsummarisedinthisreportcontainsinformationthatwehopewillbeusefultotheBankingStandardsBoardinfulfillingitsownroleintakingtheprofessionalisationagendaforward.

Ourheadlinefindingisthatthepotentialexistsforprofessionalbodiestoplayasignificantroleinraisinglevelsofcompetenceandethicalbehaviourinthesector.However,alotofgroundhastobe

14ICAEW(2014),p.2.

11

coveredbeforesignificantresultsarelikelytobeseen,andthereareanumberofkeyissuesthatwillneedtobeaddressed.Wehavesummarisedtheseunderfiveheadings:

1. Thelowprofileofprofessionalbodieswithinthebankingsectorcurrently.

2. Theneedtoestablish‘goldstandard’statusamongbankingqualifications.

3. Thefragmentationoftheprofessionalbodysector,includingfragmentationinqualificationsandalackofclearpathwaysandlinkstocareerprogressionwithinfirms.

4. Therelationshipbetweenbanksandprofessionalbodies,whichisoneof‘customerandsupplier’ratherthanofpartnersforminga‘communityofinterest’amongbankers.

5. Thelackofaclearlydefinedroleforprofessionalbodiesbeyondtheprovisionofqualifications.

Inthenextsectionwesetoutinmoredetailwhatwemeanbyeachofthese,withexamplesfromtheresearch.

12

3 Centralfindings3.1 Headlinefinding:Thepotentialexistsforprofessionalbodiesto

playasignificantroleinraisinglevelsofcompetenceandethicalbehaviourinthebankingsector

Wespokeextensivelytorepresentativesofbanksandbuildingsocietiesandofprofessionalbodies.Wefoundthat,althoughtheprofessionalbodiesinbankingcurrentlyhavealowprofile(seeissue1below)andanumberofproblemswhichwillneedtoberesolved,therewasgeneralagreementthatprofessionalbodieshaveanimportantroletoplay.Therewerealsosomefairlyclearideasaboutwhatneedstobeputinplaceinorderfortheprofessionalbodiestobecomemoreeffectiveinplayingthatrole,butrecognitionthatthiswilltakesomeeffortandcaretogetright.

Asonerespondentfromabankorbuildingsocietysaid:

Itdependsonwhatreally.Theyneedtoclearlymeetthedemandsideofneedfrom

individualswithinbanksandbuildingsocietiesandtheorganisationspossiblyultimately

payingforthose.Thatmightbeintheformofqualificationsoritmightbeintheformofa

softersenseofbelonging.ThroughtheoutlookofCPDorjustfunctionalnetworkingand

understandingbestpracticesacrossthesector.Ithinkthereisdefinitelyarolefor

professionalbodieswhichcouldpossiblybeenhanced.

Therewasaconsistentcallfrombankandbuildingsocietyrepresentativesfora‘goldstandardqualification’inbanking(seeissue2below).Clearlythisimpliesthatsuchaqualification(orsetofqualifications)doesnotexistcurrently.However,althoughtherewassomedissatisfactionwithinbanksandbuildingsocietiesaboutthestandardofqualificationscurrentlyavailable,themainmessagefromtheseinterviewswasthatthemarketinbankingqualificationsiscurrentlyfragmentedtotheextentthatbanksandbuildingsocietiesfinditdifficulttojudgethequalityofbankingqualifications,oreventounderstandwhatisonoffer(seeissue3below).

Asoneintervieweefromabankorbuildingsocietysaid:

That’sdisappeared,yeah[workingtoaparticularprofessionalqualification].Becausethe

routethroughisnowsocomplex,it’snotreallysomethingthatpeoplehavealookatvery

much……

…...BecauseIbecameverydisenchantedwithwhatwasonofferfrom[nameofprofessional

body],weusethemforthosequalificationswehavetousethemfor….Thenforourother

peoplewe’retendingtoputthemthroughmorepracticalbaseddevelopmentlikeNVQs

[NationalVocationalQualifications].

Anotherintervieweefromabankorbuildingsocietycommented:

BecauseI’mprettysurethatall19ofthem[professionalbodiesinthebanksandbuilding

societiessector]areforsomething.Theyarebespokeandusefulandadditiveintermsofan

individual’sskill-set.Butweasanorganisationcan’tvalidateall19ofthem,otherwisethat

wouldbesomeone’slife’sworktodoso.

Manyofourintervieweeslookedbackonthedayswhenbankingqualificationswereanexpectationforanyonewhowishedtoworkinbanking,asaneraofgreaterprobityandtrust.

ThesectormaynowhaveadvancedanddiversifiedtothepointwhereasinglebankingqualificationmodelledontheoldCharteredInstituteofBankersqualificationsisnolongerappropriate.However,

13

theredoesappeartobeageneralsensethatsomethingvaluablehasbeenlosthere.Morefundamentalthanaqualificationassuch,whathasbeenlostisperhapstheexpectationthatbankerswillneedtodemonstrateasolidgroundinginthefundamentalsofbankingiftheyaretoprogressintheindustry.

Asaseniorintervieweefromabankorbuildingsocietysaid:

AndI’mabit…old-schoolbecauseIthinkthatthe[situation]asusedtobe[with]the

CharteredInstituteforBankers’exams,takingpeoplethroughthat,justgettingthevery

basicsofunderstandingwhattheirjobis,butmorethanthat,agoodunderstandingof

balancesheets,profitandlossaccountsandallthosethingsthatgotodeliveringsound

understandingofhowabusinesslikeoursisstructured.Ithinkit’saveryimportantpieceof

armourythatpeopleshouldhave.

Areinstatementofthisexpectation,albeitonamodelthatreflectstheneedsofthemodern,diversesector,islikelytofindconsiderablesupport,particularlyamongseniorbankers.Note,however,thatthecapacityforsupportofthiskindislimitedbythepresenceofpeopleinthesectorwhoremembertheoldregime.Whentheseseniorbankershaveretired,re-establishingprofessionalisationinthesectorwillbemoredifficult.

Itisalsonoteworthythatthoseprofessionswhicharestillwell-established(e.g.law,accountancy)appeartobehighlyvaluedwithinthesector,whichsuggeststhatthereisvalueplacedontheprofessionsingeneral,andpotentialforthebankingprofessionalbodiestobecomeequallywellrespectediftheybecomemoreestablished.

Akeyaspectofprofessionalismwhichisgenerallythoughttohavebeenlost,andtowhichthereisreasontobelievebankerswouldwelcomeareturn,isthestatusofprofessionsasconstituting‘acommunityofinterest’.

Forsomeinthebanksandbuildingsocietiesthisisconnectedtotakingprideinwhatonedoes:

There’llalsobepeopleinthatgroup[mid-levelleaders]whowouldbeadvocates(for

professionalbodymembership)becausetheyseeitasaninvestmentinthem,theyseeitas

beinglike,‘Iwanttofeelproudagain,Iwantmypeopletofeelproud,Iwantmyfamilyto

feelproudandIdon’twanttobeembarrassed[tobea]banker–[so]howdoIhelpmake

thatdifference?’

Individualswhoaremembersofasuccessful,establishedprofessionalbodyhaveanopportunitytoshareideasandbestpracticewhichisnotnecessarilydrivenbythecommercialpressuresinherentintheirrelationshipwiththeiremployer.Professionscanprovideanalternative‘lens’throughwhichtoviewtheworkofbanking.Throughthislensconsiderationssuchastheclient’sbestinterests,andthewiderpublicinterest,canbecomesalientinawaythattheywouldotherwisenotbe.

Whilstreasonsweregiven,then,forthefirmstobereceptivetoprofessionalisation,wefoundalsothateffortsarealreadybeingmadebyprofessionalbodiestobecomemorethanjustprovidersofqualifications.Onesubstantialdevelopmentthatisalreadyunderwayisthemovetoarobust,substantial,andmonitoredcontinuingprofessionaldevelopmentrequirementformembers.CPDisthemeansbywhichprofessionalskeeptheirknowledgeandskillsuptodate,butitcanalsoactasaconsistentreminderofthevaluesandprinciplesunderlyingprofessionalwork.However,whilsteffortsarecertainlybeingmadehere,thereisstillsignificantworktobedoneasacommentfromabank/buildingsocietyintervieweesuggests:

SoforinstanceI’mamemberoftwoinstitutes,bothofwhichrequiremetodoCPD,andIdo

dosome.Butneitherinthelast20yearshasevercheckedifIdo.

14

Wealsofoundthatprofessionalbodieswouldliketohavearoleinoverseeingethicalstandardsandreinforcinglevelsofethicalbehaviourinthesector.Theyarecurrentlylimitedinthisregardbytheirlackofaclearlydefinedroleandthepowerstofulfilthatrole(seeissue5below).Andagainsomebankandbuildingsocietyintervieweesnotedthattherewassomewaytogoonthis:

WhenIlookedatitIthought‘aretheinstitutes[the]peopletotellusaboutethics?Dothey

haveaparticularexpertiseinethics?’I’mnotsayingthey’rebad.Butifoneday,Iwantedto

doastudyonethics,wherewouldIgoto?Woulditbemyprofessionalinstitute?I’mnotsure

itwouldbe.I’mnotsayingthey’rebeingunethical,butaretheytheexpertsonethics?I’m

notsuretheyare.Atthemomentanyway.IfIwantedtogettogripsaboutethicsImight

cometoauniversitylikeyourselvesandadepartmentthatspecialisesinit.

Nonetheless,thereiseveryreasontothinkthatarolecouldbedefinedwhichtheprofessionalbodiescouldeffectivelyfulfil.Andmanyintervieweesfrombanksandbuildingsocietiesemphasisedtheirreceptivitytothis:

Ithinkthey[professionalbodies]couldandshouldplayagreaterrole[inthesector],yes….

Anothersaid:

Myviewonthatis,intermsofethicsandculture,profqualscanhaveaparttoplay….

Professionalbodieswerealsoawarethattheintroductionofthecertificationregime,wherebyindividualsmustbeaccreditedassuitablepersonstofulfiltheirroles,presentsanopportunityforthemodelofall-roundprofessionaleducationasopposedtodiscrete,targetedtraining.Agoldstandardqualification,orqualificationframework,whichlinkedtotheregimeandwasrecognisedbytheregulatorasdoingsowouldbeanotherboosttotheprofileofprofessionalbodies.Someofthebankandbuildingsocietyintervieweeswereenthusiasticaboutthis:

Mysecondthoughtis;howdoesitsupersedewhattheregulatorisaskingustodo?What

couldaprofessionalbodytakeawayfromtheregulatorsandmakesimpler?Becauseweget

massiveoverlapswiththisregulatorwantingthisandthatregulatorwantingthat.It’s

actuallythesamestuff-theyjustwantdifferentformatsorananswertoslightlydifferent

questions.We’vespentalotoftimereportingtoaregulator.Soifaprofessionalbodycould

simplifythat,tosay‘theregulator’sheretodothisandtheprofessionalbody’sheretodo

this,andifyouadheretotheprofessionalqualificationframework,thatgivesyouthereally

goodbestpracticemethodologiesandproofsthatsaythatyourpeoplearehittingthis

standardandrequirement’thatyoucanthenreporttotheregulatorthenthatwouldbe

great.

Andinlinewiththissomefirmsrecognisedthattheycoulddomoretoalignprogressthroughtheorganisationtothegainingofprofessionalqualifications.

Onethingwecoulddoisrevisitourpolicyonhowpeoplecanprogresswithinthe

organisation.Havingaclearerview.We’veemployedalotofapprentices,mostofthemhave

movedontofulltimepermanentroles.Ithinkweneedtobesayingtothem‘yournextstep

is…’andthatstepisaprofessionalqualification.Ithinkwecouldsetanexamplethere.

Thepotential,then,isthereforeffectiveprofessionalisationofthebankingsector.However,thereareatleastfivekeyissueswhichwillneedtobeaddressedbeforethiscanbeachieved.

15

3.2 Keyissuesforprofessionalbodiesinthebankingsector3.2.1 Issue1:Thelowprofileofprofessionalbodieswithinthebankingsector

currently

Thisissuehasbeencoveredtosomeextentintheintroduction.Butitisworthreiteratingthatthebankingprofessionalbodiescurrentlyhavealowprofileinthesector,bothinthesensethattheyhavepoorvisibilityandarepoorlyunderstood,andinthesensethatthereisnotaconsistentviewthattheyareplayingavaluablerole.

Thereareanumberofindicationsofthisarisingfromourresearch.Oneissimplythatbanksandbuildingsocietieswereunabletogiveaclearaccountoftheirviewsontheprofessionalbodies.Tellingly,theintervieweesfrombanksandbuildingsocietiesweregenerallyunawareofhowmanyoftheiremployeescurrentlyholdaprofessionalqualification,andwereonlyabletoprovidevagueestimateswithlowconfidencethatthesewereaccurate.Mostreportedthattheirorganisationdidnotkeeprecordsofthesefigures,surelyanindicatorthattheyarenotcurrentlyhighlyvalued.

CertainlyacrossthegroupasawholeIhaveabsolutelynoidea.Whichinitselfsays

something.

Anotherintervieweefromabankorbuildingsocietysaid:

TheanswerisIdon’tknow,I’dbeguessing.ThereasonI’mguessingisthatwedon’tactually

holdthatinformationcentrallysoI’mnotsurethere’sawayofmetellingyouthat.

Wealsofoundthattheamountandtypeofsupportgiventoemployeesworkingtowardsaprofessionalqualificationispatchyandinconsistent.Professionalbodiesreportthattheamountoffinancialsupport,forexample,isoftendependentonthelocationoftrainingbudgetsintheorganisation:ifthereisacentralfundforprofessionaltraining,thensupportismorereadilyavailable.Ifitislefttolinemanagers’budgets,thenprofessionaltrainingoftenmissesoutasitislefttocompetewithotherpriorities.OftenintervieweesfrombanksandbuildingsocietiesreportedthatsupportdependedontheextenttowhichtheProfessionalQualification(PQ)orCPDworkalignedwiththeemployee’srole,forexample:

(Interviewer)Areyouinaposition…toallowpeopletimeoffforstudy,payforqualification

orfundCPDwork,etc.?

(Respondent)Thoseareprobablyinplace,andthekeycriteriaarethequalificationneedsto

beconnectedwiththerole.It’sfullyfundedandsupported.

Onereasonforthelowprofileoftheprofessionalbodiesisthefragmentationofthesectorandofthequalificationmarket,whichmakesitdifficultforbankandbuildingsocietystafftounderstandwhatisavailable.Anothermaybethatthecultureofbanksandbuildingsocietiesiscurrentlysuchthatprofessionaleducationisnotseenasagoodinvestment.Firmsarefocusedontechnicalskills,inwhicharenatheprofessionalbodiesaremerelyoneprovideramongmany.Theyarealsofocusedonregulatorycompliance,asevidencedbytheburgeoningcomplianceindustry,butthisisnotthesameastheethicalunderstandingandreasoningskillsthataneffectiveprofessionaleducationcanconfer.

16

3.2.2 Issue2:Theneedtoestablish‘goldstandard’statusamongbankingqualifications

Therewasaclearconsensusarisingfromourinterviewswithbanksandbuildingsocietiesthata‘goldstandardqualification’inbankingdoesnotexistcurrently.Asoneintervieweeputit:

Forleaderstoseequalificationsasvaluableagainweneedtohaveabsoluteconfidencein

thequalityofthequalificationanditneedstobeclearhowitworksandtheadvantagesofit.

Forindividualsitneedsleaderstosay‘ifyouwanttogetoninthisbusinessyou’vegotto

followoneoftheseroutes’.Oneobviouslyfollowstheother.Untilwe’recompletelyconfident

thatthequalificationistherightone,thenwewon’tbemakingitpartoftherequirementto

progress.

Andanotherrespondentnoted:

[Thisdoesmakethesituation]abit‘chickenandegg’.Untilit’sestablishedandthisishowyoudothings,it’snotvalued.Youcan’tgetthevalueuntilit’sestablished.Itwouldhaveto

besomethingprettyclearcutandusefuland‘thisisthewaytodoit’andbackedbythe

regulator,andwhatkindofbusinessbenefitwouldyougetoutofitinorderforpeopleto

takeiton.

Equally,therewasaclearconsensusthatsuchaqualificationwouldbevaluableanddesirable.

Sure.Ithinkthatifaprofessionalbodyweretocreateagoldstandardforcomplianceand

conductandethics,thenthatwouldbeverypositive….

Orasanotherputit:

Somaybeanotherwaytolookatitis,becauseIdosee…thebenefitofthat...Thatwouldbe

akindofhealthcheck,itwouldbeasortof…kitemark.

Thegoodnewsfortheprofessionalbodiesisthatagreatmanyintervieweesthoughtthatbankersoughttohaveasolidgroundinginthefundamentalsofbanking,whichcouldbeachievedthroughsomeformofbankingqualificationor,perhapsmorelikely,throughatieredframeworkofqualificationswhichwouldcontainsomecommon,generalistcontentalongsidespecialistcontentforpeopleworkingindifferentareasofbankingandoccupyingdifferentroleswithinthoseareas.Boththegeneralandthespecialistcontentwouldneedtoberelevant,informedanduptodate.Byincludinggeneralcontentalongsidespecialistcontentinthisway,itwouldbepossibletoavoidasituationinwhichbankersaremadetogainsubstantialamountsoftechnicalknowledgethattheywouldnotthenapplyintheirjobs(aproblemwhichwasreportedevenofthefondlyrememberedCharteredInstituteofBankersqualifications).Generalcontentcouldincludesuchsubjectsasthehistoryofbanking,thesocialroleofbanks,andperhapsthestatusofbankingasaprofession,thefundamentalfinancialfactsabouthowbankswork(andsomeaccountofkeyconceptssuchasrisk),alongwiththevaluesandprinciplesunderlyingandinformingbankingactivities,includingtheresponsibilityofbankerstoworkinthepublicinterest.

Myview,andI’vehadacareerinbanking,wouldbethatgenerallyasyouembarkonthat

careeryouwouldideallytakesomequalificationswhicharequitewideranging.Gradually

youwouldfindyourareaofexpertiseandasyouprogresswouldbecomemorespecialised.

(professionalbodyinterviewee)

….toknowthattherewasauniversalunderstandingofthenatureandcontextofbanking,

andthatwaswellunderstoodandthepurposeofbankinginsociety,combinedwithareally

17

thoroughunderstandingofconductandtheresponsibilitiesaroundthat,Ithinkthatasan

entryintoanorganisationknowingthatwasacommonlyheldview,couldbeverypowerful.(bank/buildingsocietyinterviewee)

Asidefromallowingbankerstodotheirjobsmoreeffectively,oneadvantageofa‘goldstandard’qualificationsframeworkwouldbethatbanksandbuildingsocietieswouldbeabletobenchmarktheiremployees,andwouldhaveaclearideaofwhatcouldbeexpectedfromaprospectivejobcandidateintermsofknowledgeandskills.Bankerswouldknowthattheywereworkingtowardsaqualificationthatwouldbegenuinelytransferable,andwhichwouldsetthemupforacareerwhichmighttakeinanumberofdifferentorganisations.A‘goldstandard’qualificationmightalsoallowbankstobecomelessreactiveandcompliance-focusedintheirresponsetoregulation.Bankerswithanall-roundprofessionaleducationmightbeexpectedtobemoreawareofandresponsivetoethicalissuesratherthanfocusingoncomplyingwiththeletterofthelaw.

Asanotherintervieweefromabankorbuildingsocietyputit:

Thereisanunderpinning…tobeaCharteredAccountantyouhavetobequalifiedand

everybodyknowsit’sreallydifficulttodoit.Itdoesn’tmeantosaythatpeoplewhoare

CharteredAccountantscan’tbehaveunethicallybecausetheydo.Butitprovidesalevelof

confidencethatatleastthey’restartingfromapositionwheretheyoughttoknowwhat

they’redoingbecausethey’vebeenassessedascompetent.Idothinkthatworks.

A‘goldstandard’statuswouldalsohelptoestablishtheconceptoftheprofessionalbankerinthemindofcustomers,raisingtheprofileofprofessionalismandleadingthepublictohaveenhancedexpectationsof,andrespectfor,theservicesbeingprovidedbyfirmsandtheiremployees.

3.2.2.1 Whatisagoldstandardqualification?

Wehavemadeconsiderableusealreadyoftheideaofa‘goldstandardqualification’.Ifthisistobeausefulidea,itisimportanttobeclearastowhatthisideahaspackedintoit.

Anumberoffeaturesthatagoldstandardqualificationmusthavearesuggestedinthequotesabove.Someofthesefeaturesareintrinsictothequalification(ortierofqualifications)themselves.

i) Goldstandardqualificationsareofacertainquality–thisdoesnotmeantheyhavetobeatahighacademiclevel:theycanbepitchedatvariouslevels,buttheyhavetobechallengingordemandingrelativetothelevelatwhichtheyarepitched.

ii) Theyprovideindividualswhohavethemwitha)skillsandb)agraspofethicalconcernsincludingmattersofindividualconductandperhapsalsoofthesocialroleofthefirm,whichareusefultotheorganisationsinwhichthoseindividualswork(inthiscaseBanksandBuildingSocieties),and/ortheregulatoryframework.

Thefeaturesabovehelptoensureacertainkindofconsistency.Firmscanexpectthesamelevelofcompetenceandunderstanding,includingethicalunderstanding,inthosewhohavethequalifications.Theyalsoprovideabasisforconfidenceinthequalificationsonthepartofbothemployersandclientsorcustomers.

However,evenifoneoftheexistingprofessionalbodieswerecurrentlyprovidingaqualification(orsuiteofqualifications)withtheaboveintrinsicfeatures,orweretointroduceone,thisqualification(orsuite)wouldnotautomaticallybegoldstandard,simplybecausetobegoldstandardaqualificationmustberecognisedasgoldstandard.Withoutthisrecognition,thekindofconsistencyacrossawholesectorthatischaracteristicofatrulygold-standardqualificationwillnotbeachieved.Thisiswherethe‘chickenandegg’problemalludedtoinonequotationabovearises:inordertobe

18

goldstandardthequalificationhastobeestablished,andpartofitsbeingestablishedisitsbeingrecognisedasbeinggoldstandard.IntheUKbankingsector,thisproblemisgreatlyexacerbatedbytheextentoffragmentationinthequalificationsmarket,andthedifficultyfirmshaveintellinggoodqualificationsfrombad,andknowingwhichwouldbemostappropriatefortheiremployees.Issuenumber3belowdescribestheseproblemsinmoredetail.

Itmaybethatactionbyanexternalagencyisnecessarytoaddressthis‘chickenandegg’problem.Bysettingindustry-widestandardsforqualificationsandmonitoringprofessionalbodies’adherencetothosestandards,suchabodycouldprovideexternalassurancetofirmsoftheirquality,andhelptoestablishindustry-widerecognitionofqualifications.

3.2.3 Issue3:Thefragmentationoftheprofessionalbodysector,includingfragmentationinqualificationsandalackofclearpathwaysandlinkstocareerprogressionwithinfirms

Asnotedabove,probablythemostimportantreasonforthelowprofileofthebankingrelatedprofessionalbodiescurrentlyisthefragmentednatureoftheprofessionalbodysectorandthequalificationsmarket.Thereareovertwentybodieswhoprovidearangeofprofessionalbodyservicestothesector.Whilethemajorityofthesearebanking-relatedprofessionalbodies,ratherthanbankingprofessionalbodies,thesectordoesappearcrowded.Mostofourintervieweesagreedthatthereshouldbefewerprofessionalbodies(althoughveryfewthoughtthatasingleprofessionalbodywouldbeenough,citingtheneedtocatertoadiversesectorandthevalueofhealthycompetitionbetweenbodies),orthatattheveryleastthereshouldbemorecoordinationbetweenthem.

Asalreadytouchedonabove,banksandbuildingsocietiesconsistentlyreportedthattheyfounditverydifficulttogetaclearviewofthequalificationsavailable,andtojudgetheirrelativemerits.Asoneintervieweereported:

AlthoughIgettentofifteenemailsadayfromprovidersoftraining,trainingorganisations…

it’svirtuallyimpossibletopickout…thevariablequalityof[thesequalifications].

Banksandbuildingsocietiesalsoreportedthattherewasalackofclearpathwaysamongqualifications.Whileitdoesappearthatsomeindividualprofessionalbodieshavemadesubstantialeffortstodefinesuchpathways--atleastwithintheirownqualificationoffering,ifnotbetweenqualificationsofferedbydifferentbodies--themessageisclearlynotgettingthroughtofirms.Inparticular,banksandbuildingsocietiesarefindingitdifficulttolinktheavailablequalificationstoroutesofcareerprogressionforemployees.

Ithinktheinstitutesandbodiesshouldbebetteratsignpostingwhatcomesnext.Ithinkthey

say,‘you’vegotit,we’reofferingthisnextone,’butthenextonemaynotbetherightone.It

maybeforadifferentbodyorspecialityandyou’reworkingyourwaythroughalmost,not

quiteblindly,butifyou’relookingatsaynineteenbodies,afteryou’vedonethatyou’rebest

toactuallygosomewhereelse.AndIdon’tthinkthere’sthatframework.)

Andanotherbankandbuildingsocietyintervieweecommented:

Whatwouldbequitehelpful,Ithink,andthiswouldbevalueaddedratherthanwhatwe

needtodo,isprobablyhavingdonesomeofthejoiningupforus.Sohowdoesyour

qualificationconnecttowhattheFCA[FinancialConductAuthority]istalkingaboutright

19

now?WhatdoesitmeaninconnectiontoSMR[SeniorManagersRegime]?Whatdoesit

meaninconnectiontothe[certification]regime?

Bothbanksandbuildingsocietiesandprofessionalbodiesreportedthattheywouldwelcomeexternalsupportinvalidatingqualificationslinkingthemtoanoverallframework,andatleastonehadinitiatedaprocessofexternalvalidationfortheirownqualifications,workinginconcertwithaparticularprofessionalbodyandaUniversity.Butthereisadesireforamoregeneralsolution,soperhapsratherthanareductioninthenumberofprofessionalbodies,someoverarchingexternalsupportandcoordinationwouldsolvethefragmentationproblemandbringcoherence.

I’mnotsurewhattheentirerangeofnineteen[professionalbodies]lookslikeandifthey’ve

allgotcrediblecompetingofferingsinthemarketthenthosethatwerethestrongerwereto

surviveandmaybereceivetheirBankingStandardsBoard’ssealofapproval….I’msurethat

wouldhelpsothatthey’reaccreditedorauthorisedorsanctionedorapprovedbyBanking

StandardsBoard.Thatmightbeawaytogo.(bankorbuildingsocietyinterviewee)

3.2.4 Issue4:Therelationshipbetweenbanksandprofessionalbodies,whichisoneof‘customerandsupplier’ratherthanofpartnersforminga‘communityofinterest’amongbankers

Aconsistentlyemergingtheme,foundintheinterviewsbothwithprofessionalbodiesandwithfirms,wasthatbanksandbuildingsocietiesseebankingprofessionalbodiesasessentiallysuppliers.Asinanyrelationshipbetweencustomerandsupplier,thereisthereforeanimbalanceofpowerbetweenthetwopartiesinthisrelationship.Professionalbodiesconsistentlyreportedthattheirfocuswasonidentifyingtheneedsofbanksandbuildingsocietiesandthenseekingtotailortheiroffertomeettheseneeds.Whilethisisobviouslydesirabletosomeextent,itpotentiallylimitstheprofessionalbodies’abilitytoinfluencefirms,particularlyonissuesofethicsandculture.

Italsocontrastswiththosesectors,suchaslawandaccountancy,inwhichprofessionsaremorefirmlyestablished.Inthesesectors,thereisadialoguebetweenfirmsandprofessionalbodies,andprofessionalbodiesareseenaspartof,andbelongingto,thesector–‘ourprofession’.Ourintervieweesfrombanksandbuildingsocietiesdidnotseeprofessionalbodiesinthisway–professionalbodieswereseenasexternaltothesector,actingratherasasuppliertoit.Asonebank/buildingsocietyintervieweeputit:

We’vehadconversationswithXandY[professionalbodies]…wespend…moneyeachyear

withthembutalotofit’stransactional.Alotofit’s,‘ourpeopleneedtobequalifiedtomeet

theregulator,youprovidethequalification,weputourpeoplethroughittopassit.’

Notonlythis,butprofessionalbodieswereclearlyinthepositionofneedingtoselltheideaofqualifications,andnotjusttheirownparticularqualifications,tofirms,aclearcontrasttoothersectorswherethevalueofprofessionalqualificationsistakenasread.Professionalbodies,whentheyspokeaboutengagementwithbanksandbuildingsocieties,reporteddealingwithtrainingorHRfunctions,andnotwiththe‘C-Suite’ofseniorleadersattheverytopoftheorganisation–anindicationthattheyareseenastrainingprovidersratherthanpartnerorganisationswithasharedpurpose.Againthiswascapturedbyabankorbuildingsocietyintervieweeaswell:

Ithinkthere’sjusttoomanyplayersinmembershiporganisations,intrainingproviders,Ijust

thinkthere’stoomanypeopleanditdoesfeelabitmorelikeit’sabusiness….

20

Aneffectofthisimbalanceofpowerbetweenfirmsandprofessionalbodiesisthatprofessionalbodieslackthepowertodefinestandards,whetherofcompetenceorethics,whichfirmsarethenexpectedtoaspireto.Ontheorganisationallevel,professionalbodiesareunabledirectlytochallengebanksandbuildingsocietieswhichmaybefailingtoliveuptothesestandards;ontheindividuallevel,bankersarenotinculcatedwithasetofvalues,prioritiesandexpectationswhicharedefinedindependently,andhavestandingoutsidethecultureoftheiremployer.Thecultureoftheprofessionalbodycannotthereforeactasacheckonthecultureoftheemployingorganisation.

Akeyaspectofdefiningaprofessionalcultureisderivedfromtheroleoftheprofessionalbodyinservingthepublicinterest.Keepingthisethicalconceptatthecentreoftheprofessionalbody’svariousactivitiesallowsthemtogiveindividualsanalternativelensthroughwhichtoviewthefirm’sactivities–onedefinedbybroadervaluesthantheshareholdervaluewhichisthefirm’smainfocus.Andseveralbankorbuildingsocietyintervieweesrecognisedthis:

Oneofthethingsthebankshaveprobablylostsightofisthepublicinterest.Becauseitisso

amorphous.Absolutelywe’reinterestedinourclients’interests,shareholders,regulators’

interests,sometimeswestretchintoourcommunitiesandtheirinterests.Thisconceptof

public,whenit’stranslatedintosystemicriskandtaxpayers’moneybecomesalotmorereal.

Fortheprofessionalbodiestoprovidesuchanalternativelensrequiresthemtobeengagedinactivedialoguewithmembersandemployers.A‘communityofinterest’formedoftheprofessionalbodies,theemployingorganisationsandindividualmembers/employees,responsivetochangesintheindustrywhilemaintainingafocusonfoundationalethicalideassuchasthepublicinterest.Aprofessionalbodyintervieweenoted:

Insectorswherethereisastrongprofessionalbody,you’llfindthatthatbodyalsoactsasa

portofcallforthoseindividuals.Soifthey’vegotaproblemwiththeiremployerorethical

standards…you’llfindthatthey’vegotethicaladvicelinestosupportthem.Inmyexperience

thatisnotsomethingyouassociatewiththebankingindustry.

3.2.5 Issue5:Thelackofaclearlydefinedroleforprofessionalbodiesbeyondtheprovisionofqualifications

Asnotedabove,itappearsthatbanksandbuildingsocietiescurrentlyseethebankingprofessionalbodiesasprimarily,ifnotexclusively,purveyorsofqualifications.Despitethis,wedidfindevidencethatprofessionalbodieswouldliketobevaluedforabroaderrangeofactivities.Theyareclearlytryingtodefinetheirownroleinseveralareas,butwouldbenefitfromanexternalsteer,externalsupport,andpossiblyalsothekindofexternalvalidationthatappliesinotherprofessionsservedbymultiplebodies.

Abankorbuildingsocietyintervieweecommentedapprovinglyontheideaofaprofessionalbodywithawiderconceptionofitsrole:

…Itwouldbeabsolutelyamazingtohaveaprofessionalbodythatwascreatingamuch

strongerdialoguecollectivelyacrossthebanksasopposedtofinancialservices,whatarewe

herefor,howisitworking,whatarewestrugglingwith.Itcreatesasenseofbelongingand

unitythatwe’redoingsomethingusefulthatisworthtalkingaboutratherthanbeingbeaten

bytheregulator.Themorewecangetthedialogueoutandstartreallyhelpingnotjustother

banksbutsocietyingeneral,Ithinkthere’sastrongersensecreatedthatremindsyouof

stewardshiponbehalfofsociety…

21

Oncontinuingprofessionaldevelopment,severaloftheprofessionalbodiesaremakingmovestowardsamorerobustoversightrole,settingminimumCPDrequirementsandmonitoringadherencetothese,withthepossibilitythatmembershipwillberevokediftheyarenotmet.Onelimitingfactorheremaybetheworrythattooonerousarequirementwillmakethemunattractivetobankingemployees,afurthersymptomofthepowerimbalancenotedabove.Andasnotedabove,itisalsoanareawherebanksandbuildingsocietiesaremorescepticalofwhatiscurrentlyoffered:

Itfeelswhenyou’rewritingthechequeforthisthatyou’repayingawayalotofmoneyand

notseeingahugereturnforthat.TheCPDstuffthatcomesonofferisoftenquitemediocre.

Itfeelslikeyougetyoureightcreditsbygoingtothisconference,youattendtheconference

andyousometimeswishyouhadn’t.Sothereissomethingaround,isthisCPDreallyleading

edge,isthishighquality,isitreallyvalueformoney?

Ondisciplineandtheoversightofethicalstandards,professionalbodiesappeartobeveryunsureoftheirrole,apointwhichisreflectedinthefactthattheyareperceivedasrelativelyineffectiveincontributingtolevelsofethicalbehaviourandculture.Aprofessionalbodyintervieweeacknowledgedthattheircodesofethicsdonotcurrentlyhavethestatuswithintheindustrytobethebasisofrobustethicaloversight:

Essentiallywhatyou’vegottodoisgettheemployerstocometogetherandagreeacode

whichtheywillimposeontheiremployees,acodeofethics,butwhichisrunbysomeone

whoisn’tthem.Thehardquestionis,wouldyousackanemployee,thathasbrokenacode

thatsomeoneelsehasdecided,andthatyoucan’tcontrol.

Anadditional(valid)concernhereisaroundpotentialoverlapwiththeroleoftheregulator,althoughprofessionalbodiesalsoappeartobeunsureofthelegalbasisforanydisciplinaryaction,andconcernedthattheymightopenthemselvesuptolegalchallenge.Theyalsoreportthattheylackpowerstoinvestigatecasesofpotentialwrongdoing.

Theanswermaynotbetogiveregulatorypowerstoprofessionalbodiesthemselves,buttodefineaclearrelationshipwiththeregulator,perhapsusingprofessionalbodiesasameansoffindingoutaboutcaseswhicharethenpassedontotheregulatortodealwith,withclearprotocolsfordoingso.Clearchannelsandresponsibilitiesaroundwhistleblowing,reportingand‘speakingout’arekeyhere.Eitherway,adialoguebetweentheregulatorandtheprofessionalbodies,perhapsbrokeredbytheBSB,willbenecessarytoidentifyaclearbasisforfuturecooperation.Onebankorbuildingsocietyintervieweecommentedonthisinquiterobustterms:

…wehaveinstitutes,we’vegotastandardsboard,we’vegotaregulator,peoplego‘what

thehelldotheyalldo?’Theyneedtoleadtogether.

Onadviceandguidance,thebankingprofessionalbodiesissueguidancebuttendnottohaveanadvisoryroleoperatingthroughahelplineorsimilarresource.Again,itwillbenecessarytoclearlydefinetheparametersoftheirlegitimateactivityiftheyaretohavethisroleinthefuture.

Finally,onthoughtleadership,itmaybedifficultforanyindividualprofessionalbodytospeakonbehalfofsuchadiverseprofession.However,itmaybepossible,andvaluable,fora‘canopybody’tobringtogetherrepresentativesofthevariousbodiesandattempttoidentifyaconsensusonkeyissues.Oneintervieweefromabankorbuildingsocietyputitthisway:

…youknowontheTodayprogrammewhentheyhavearepresentativeofanindustryonthat

speaksfromanindustrypointofviewbutnotinalobbyingway?Almostwedon’thavethat

inbanking.WehavetheBritishBankers’Associationandtheyhavearoletoplay,they’re

22

clearlyalobbyinggroup.Itwouldalmostbethatbodythatspeakswithclearprofessionalism

onbehalfofthebankingindustry…

23

3.3 Table1:Overviewofbanking-relatedprofessionalbodies15

Professionalbody Estimatednumberofmembers

Governancestructureandcharter

CPDrequirements Overseeingethicalstandards

Adviceandguidance

AssociationofCorporateTreasurers

Over4,000.

Hasanelectedgoverningbody:‘Council’,whichisaccountabletomembers.Day-to-daymanagementisdelegatedtotheChiefExecutiveandExecutiveteam.HasaRoyalChartergrantedin2013.

Completedeclaration,nosethours,sampletesting.

Hasacodeofethics.CasesarehandledbyaCommitteeofInvestigation.Penaltiesincludebeingstruckoff,havingtopaycosts,publicationofdecision.

‘SpeakingUp’policy,alsocasestudiesandbriefingsavailable.Ethicshelpline.

CFASocietyoftheUK/CFAInstitute

Around11,000. HasaBoardof14memberswhoareelectedbymembers.TheBoardoverseesanumberofvolunteercommitteesincludingamanagementcommittee.DoesnothaveaRoyalCharter.

(OnlyappliestothosewhorequireastatementofprofessionalstandingundertheRetailDistributionReview(RDR))

Minimum35hoursannually,ofwhich21hoursstructuredCPD.

Overseesacodeofethicsandcantakeactioninrelationtotheprofessionalconductofmembers.GovernedbyDisciplinaryReviewCommittee.

Guidanceonsomespecificissuesincludingreportingandwhistleblowing.Thereisanumbertocalltoself-reportpotentialviolations,andadviceonwhotocontactaboutreportingothers.

15PleaserefertoAppendixAfordetailsofhowtheseorganisationswereidentified

24




Adviceandguidance

CharteredBankerInstitute

Around28,000. GovernedbyaCouncilcomprisingInstitutemembersandlayrepresentatives,whichoverseescommittees.HasaRoyalCharteroriginallygrantedin1976(theInstitutewasestablishedin1875).

Requirementsvaryfordifferentcategoriesofmembershipbut35hoursperannumtotalincluding5hoursprofessionalismandethicsinmostcategories.

HasacodeofconductwhichismappedtotheFCA’sConductRules.IndependentDisciplinaryCommitteeoverseesprocedures.Varioussanctionsavailable.Expulsionsarerare.

Providesguidancetomembersonarangeofissues.Resourcesavailablethroughthewebsiteincludingonprofessionalethics.

CharteredInstituteforSecuritiesandInvestment(nowincorporatingtheInstituteofFinancialPlanning(IFP))

Over40,000. HasaBoardofDirectors–non-executivedirectorswhoaretypicallyemployedinseniorpositionsinfirmsoperatinginthesecuritiesindustry,electedbymembersforatermofthreeyears.Hasaroyalchartergrantedin2009.

(Recommended)minimum35hoursannually,ofwhich21hoursstructuredCPD.

Hasacodeofconductandadisciplinaryprocess.Membersarerequiredtotakean‘integritytest’.

Theypromoteanexternalwhistleblowinghelplinebutdonotappeartohavetheirown.

25




Adviceandguidance

CharteredInstituteofCreditManagement

Informationnotavailableonwebsite.

HasanExecutiveBoardandanAdvisoryCouncil.Thelatterincludestradecreditrepresentatives,consumercreditrepresentatives,internationalcreditrepresentatives,creditservicesrepresentativesandregionalrepresentatives.HasaroyalChartergrantedin2015.

NocompulsoryCPDbutsupported

Hasacodeofconductandadisciplinaryprocess.

Aswellassomeguidancematerialsavailablethroughthewebsite,runsalegalhelplineandgeneralguidancehelpline.

CharteredInstituteofInternalAuditors(CIIA)

About8,000intheUKandIreland.AlsopartoftheglobalIIA,whichhas180,000membersin190countries.

GovernedbytheCouncilofDirectorswhichiscomprisedofvolunteermembersandtheChiefExecutiveandisaccountabletomembers.TheChairofCouncilisthePresidentandiselectedannuallybymembers.HasaRoyalChartergrantedin2010.

NospecificrequirementforIIAmembers.GlobalCertifiedInternalAuditorsreporttoIIAGlobalandneed40hourspa.ThosewithQualificationinInternalAuditLeadership(QIAL)require20hourspa.

Codeofgoodpracticerequiredtorefertopublicinterest.Handledbydisciplinarycommittee.Sanctionsincludereprimand,conditionsonfurthermembership,suspensionandexpulsion.

Publishesguidance–‘130oddpiecesovertherecentyears’.Noadviceline.

26




Adviceandguidance

CharteredInstituteofTaxation

17,000. GovernedbyaCouncilwith28members.A‘laypublicinterestobserver’alsoattendscouncilmeetingsbutisnotamember.Foundedin1930andhasaRoyalCharter.

Minimum90hourspaofwhichminimum20hoursstructuredtraining.Maybeaveragedover2years.

Overseesprofessionalrulesandpracticeguidelines.ThebodyresponsiblefordisciplineistheTaxationDisciplinaryboard.

Memberscanemailwithprofessionalstandardsqueries.

CharteredInsuranceInstitute(CII)

Over115,000. HasaRepresentativeCouncilandanumberofboards,committeesandpanels.HasaRoyalChartergrantedin1912.

Minimum35hoursannually,ofwhich21hoursstructuredCPD.

Codeofethicsanddisciplinaryproceduresinplace.GovernedbytheCIIDisciplinaryRegulationsandDisciplinaryProcedureRules.Legallyprovenbreachesarepublished.

Publishesguidanceonarangeofissues.Includingguidancematerialsincludingonethicalissuese.g.conflictsofinterest.Thereisalsoaguidetounderstandingandapplyingthecodeofethics.Nohelplineformembers.

GlobalAssociationofRiskProfessionals

Over150,000. HasaBoardofTrusteesmadeupofindustryrepresentativesandoneacademic.

40hourseverytwoyears.RecommendedforFinancialRiskManagers(FRMs),mandatoryforEnergyRiskProfessionals(ERPs).Recordedandsubmittedthroughcredittrackertool.

Hasacodeofethicsbutdoesnothaveadisciplinaryfunction.

Providesguidancetomembersthroughthewebsitebutdoesnothaveanadvicefunction.

27




Adviceandguidance

IfsUniversityCollege16 Over17,000 IncorporatedbyRoyalCharter.HasaBoardofTrusteesmadeupofindustryrepresentativesandacademics.

35hoursperannummandatoryforCharteredtitleholdersandrecommendedforothermembers.

HasaCodeofEthicsandadisciplinaryprocedure.

Sanctionsincludereprimand,conditionsonfurthermembership,suspensionandexpulsion.

Providesguidancetomembersthroughvariouschannels.

Hasextensivethoughtleadershipoutputandonlineresourceprovision.

InstituteofProfessionalFinancialManagers

Over10,000 Hasagoverningbody:the‘WorldCouncil’withrepresentativesfrom12geographies,includingfivecouncilmembersfromtheUK.

Nonelisted Nonelisted Nonelisted

InstituteofRiskManagement

Over5,000. HasaBoardofDirectors(industryrepresentatives)whichdelegatesresponsibilityforday-to-daymanagementtotheChiefExecutive.

NocompulsoryCPD Hasacodeofconductandadisciplinaryprocess.

Hasextensivethoughtleadershippublicationsandanonlineresourcecentre.Alsorunsalegalhelpline.

16IfsUniversityCollegechangeditsnametoTheLondonInstituteofBankingandFinanceinSeptember2016.AtthetimeofconductingtheresearchitwasknownasIfsUniversityCollegeandthereforeisreferredtoassuchthroughoutthisreport.

28




Adviceandguidance

InternationalComplianceAssociation

Informationnotavailableonwebsite.

HasanExecutiveBoardandanAdvisoryCommittee,whichismadeupofindustryandacademicrepresentatives.

Minimum15hours Hasacodeofethicsandadisciplinarycommittee.Memberscanbestruckoff.Thecommitteehandles‘probablyaboutahandfulayear’ofcases.

Helpandsupportofferedbytrainingbutregionalrepresentativesaswellasheadofficetocontact.

InvestorRelationsSociety Approx.800. HasaBoard(madeupofindustryrepresentatives)andanumberofcommittees.

Recommend20hourspabutnotmandatory.

Hasacodeofconductandthepowertoremovesomeone’smembershipiftheyhadbeenfoundtohaveactedillegallyorunethically,butdoesnothaveadedicateddisciplinaryfunction.

Providesa‘KnowledgeBank’tomembersandan‘AsktheBoard’service.

PersonalFinanceSociety(affiliatedtoCII)

Over100,000. SeeCII. Minimum35hoursannually,ofwhich21hoursstructuredCPD.

CodeofethicsisthesameastheCII’scode,anddisciplinaryproceduresarealsothesame.

EthicstoolkitforFinancialAdvisersandfourguidancedocuments.Nohelplineavailable.

29




Adviceandguidance

RetailBankingAcademy About3,000 GovernedbyaCouncil,whichisanindependentbodywhosemembersareelectedbytheMembership.CouncilMembersactonbehalfofthemembership.

Minimumof35hourstotalCPDofwhich21mustbestructuredandallmustbeevidenced.

DesignatedmembersarerequiredtosubmitanannualdeclarationthattheyabidebyRBA’sCodeofEthicsandProfessionalConduct.

TheRBACouncil’sDisciplinarybodyinvestigatescomplaints,carriesoutdisciplinaryactionandhandlesappeals.

30

3.4 Table2:Overviewofqualificationsprovidedbybanking-relatedprofessionalbodies17Professionalbody Qualificationsoffered

AssociationofCorporateTreasurers(ACT)

• MCT(MemberoftheAssociationofCorporateTreasurers)AdvancedDiplomainTreasury,RiskandCorporateFinance• AMCT(AssociateMemberoftheACT)• CertificateinInternationalCashManagement• CertificateinRiskManagement• CertificateinCorporateFinanceandFunding• CertificateinFinancialMathsandModelling• CertificateinTreasuryManagement• CertificateinTreasury• CertificateinTreasuryFundamentals

CharteredBankerInstitute

UKProfessionalQualifications• CharteredBankerDiploma(retail,corporateandprivatebankingstreams)• AssociateCharteredBankerDiploma(retail,corporateandprivatebankingstreams)• ProfessionalBankerCertificate• ProfessionalBankerDiploma• AwardinBusinessBanking• CertificateinCreditUnionPrinciplesandPractice• CertificateinMicrofinancePrinciplesandPractice• CertificateinOffshorePractice

UKRegulatoryQualifications• DiplomainProfessionalFinancialAdvice(FCArecognised,appropriatequalification)• MortgageAdvice&PracticeCertificate(FCArecognised,appropriatequalification)• CertificateinComplaintHandling• BespokeandTailoredQualifications• DiplomainLendingSkills• AdvancedDiplomainLendingSkills

17PleaserefertoAppendixAfordetailsofhowtheseorganisationswereidentified

31

Professionalbody Qualificationsoffered• DiplomainFinancialServicesLeadership• CertificateinBusinessandFinancialManagement• CertificateinAdvancedBankingPractice• CertificateinUKBusiness,ManufacturingandTrade• CertificateinRealEstateFinance• CertificateinHealthcareFinancialManagement• CertificateinAgriculturalFinancialManagement• CertificateinLeisureFinancialManagement• CertificateinProfessionalSectorFinancialManagement• CertificateinBusinessBankingPractice1• CertificateinBusinessBankingPractice2• CertificateinLendingSkills• RBSProfessionalBankerCertificate• MetroBankProfessionalBankerCertificate• NAGCertificateinCredit

TheCharteredBankerInstitutealsoaccreditsqualificationsfromUKeducationinstitutionsandbankinginstitutesoverseas.

CFASocietyoftheUK • InvestmentManagementCertificateSupportingtheCFAProgramandCFAcharterholdersintheUK.TheCFAcharterisawardedbyCFAInstituteforwhichCFAUKisthelocalmembersociety.

CharteredInstituteforSecuritiesandInvestment

Pathwaysinwealthmanagement,financialplanning,complianceandrisk,operations,corporatefinance,capitalfinanceandIslamicfinance.

Withineachpathwayqualificationsareofferedatfoundation,qualifying,professionalandadvancedlevel.

CharteredInstituteofCreditManagement

Certificatesanddiplomas(includinglevel5diplomas)in:• CreditManagement• MoneyandDebtAdvice• DebtCollection• HighCourtEnforcement• TakingControlofGoods

32

Professionalbody Qualificationsoffered

CharteredInstituteofInternalAuditors(CIIA)

• CertificateinInternalAudit• IIADiploma• CharteredInternalAuditor• QualificationinInternalAuditLeadership• ITAuditingCertificate• CertificateinControlSelf-Assessment• CertifiedGovernmentAuditProfessional• CertifiedFinancialServicesAuditor• CertificateinRiskManagementAssurance

CharteredInstituteofTaxation

• CTA/CharteredTaxAdviser• ADIT/AdvancedDiplomainInternationalTaxation

CharteredInsuranceInstitute

Insurancequalifications• AwardfortheFoundationInsuranceTest• AwardinLondonMarketInsurance• AwardinGeneralInsurance(non-UK)• AwardinCustomerServiceinInsurance(non-UK)• CertificateinInsurance• CertificateinContractWording• CertificateinInsuranceandFinancialServices(non-UK)• DiplomainInsurance• AdvancedDiplomainInsurance• CertificateinLondonMarketInsuranceSpecialisation• CertificateinInsuranceMarketSpecialisation• Fellowship• BachelorsandMastersdegrees

Financialservicesqualifications• AwardinBancassurance(non-UK)• AwardinFinancialAdministration• AwardinFinancialPlanning(non-UK)

33

Professionalbody Qualificationsoffered• AwardinInvestmentPlanning(non-UK)• AwardinRetailBanking• AwardinLongTermCareInsurance• AwardinLifeandPensionsFoundations• PensionsUpdateProgramme• CertificateinAdvancedMortgageAdvice• CertificateinDiscretionaryInvestmentManagement• CertificateinEquityRelease• CertificateinFinancialServices• CertificateinInvestmentOperations• CertificateinLifeandPensions• CertificateinMortgageAdvice• CertificateinSecuritiesAdviceandDealing• CertificateinParaplanning• DiplomainFinancialPlanning• DiplomainRegulatedFinancialPlanning• AdvancedDiplomainFinancialPlanning• BachelorsandMastersdegrees

GlobalAssociationofRiskProfessionals

• FinancialRiskManager(FRM)• EnergyRiskProfessional(ERP)• CertificateinRiskandRegulation• FoundationsofFinancialRisk

ifsUniversityCollege ProfessionalQualifications• ProfessionalDiplomainBanking&Finance• CharteredAssociateProgramme

MortgageAdvice• CertificateinMortgageAdviceandPractice(CeMAP)• CeMAPDiploma(CeMAPDip)• CertificateinRegulatedEquityRelease(CeRER)

FinancialAdvice

34

Professionalbody Qualificationsoffered• CertificateforFinancialAdministrationandPlanning(CeFAP)• DiplomaforFinancialAdvisers(DipFA)• DiplomainFinancialAdvice(AdvDipFA)• CertificateinLong-TermCareInsurance(CeLTCI)• AwardinPensionsTransfer(AwPETR)

TradeFinance• CertificateforDocumentaryCreditSpecialists(CDCS)• CertificateinInternationalTradeandFinance(CITF)• CertificateforSpecialistsinDemandGuarantees(CSDG)

BankingConductQualifications• CertificateinRetailBankingConductofBusiness(CertRBCB)• DiplomainRetailBankingConductofBusiness(DipRBCB)• CertificateinBusinessBankingandConduct(CertBB&C)• DiplomainBusinessandCommercialBankingandConduct(DipBB&C)

SpecialistQualifications• CertificateinRegulatedComplaintsHandling(CeRCH)• AwardinCustomerComplaintsHandling(AwCCH)• CertificateinConsumerDebtCollection(CertDC)• CertificateinSupervisinginaRegulatedEnvironment(CeSRE)• CertificateforAutomotiveFinanceSpecialists(CertAutoFS)• DiplomainAssetFinance(DipAF)• CertificateinCreditUnionProfessionalConduct(CertCUPC)

HigherEducation• BSc(Hons)inBankingPractice&Management• BSc(Hons)inFinance,Investment&Risk• MScinBankingPractice&Management• PostgraduateCertificateinHigherEducation• PostgraduateCertificateinTeachingFinancialCapability

FinancialCapability• LessonsinFinancialEducation(LiFE)• AwardinPersonalFinanceLevel1(APF1)

35

Professionalbody Qualificationsoffered• AwardinFinancialEducationLevel2(AiFE)• CertificateinPersonalFinanceLevel2(CPF2)• CertificateinFinancialEducationLevel2(CeFE)• CertificateinFinancialCapabilityandCareersDevelopmentLevel2(CeFCCD)• CertificateinFinancialStudiesLevel3(CeFS)• DiplomainFinancialStudiesLevel3(DipFS)

InstituteofProfessionalFinancialManagers

• GraduateDiplomas• HigherNationalDiplomas• CertifiedDiplomas• Post-GraduateDiplomas• BBA(Hons)BachelorsinBusinessAdministration.CertifiedProfessionalFinancialManager

InstituteofRiskManagement

• InternationalDiplomainRiskManagement• InternationalCertificateinRiskManagement• CertificateinRiskManagementinFinancialServices

ThequalificationslistedabovearetherequirementsforadmissiontotheprofessionalmembershipgradesanddesignationsofMIRMorCMIRM,IRMCertandSIRMrespectively.

InternationalComplianceAssociation

CertificatesandDiplomas,foralllevels,in:• Anti-moneylaundering• Compliance• Financialcrimeprevention

InvestorRelationsSociety

• CertificateinInvestorRelations

RetailBankingAcademy

Qualifications• CertifiedRetailBanker• CertifiedIslamicRetailBanker• CertifiedCardsandPaymentsProfessional

CertificationProgramme• CertifiedPrivateBanker

36

Professionalbody Qualificationsoffered• BranchManagerCertificationProgramme• SMECertificationProgramme• CustomerServiceCertificationProgramme• PrivateBankingCertificationProgramme• ProductManagerDevelopmentProgramme

37

4 ResultsTheresultsbelowarepresentedthematically,combiningthesurveyandinterviewelementsoftheresearch.

Pleasenotethat‘banking-relatedprofessionalbodies’isshorthandforprofessionalbodiesthathaveasignificantnumberofmembersworkinginbanking.Assuchthiscategoryincludesthosebodiesfocusedexclusivelyonthesector(forexample,theCharteredBankerInstitute),thosebodiesfocusedprimarilyonthesectorbutwithmembersinotherareas(forexample,theInternationalComplianceAssociation,roughlyninetypercentofwhosemembersworkinbanking)andthosebodiesforwhombankingismerelyonesectoramongmanyinwhichtheyarewell-represented(forexample,theInstituteofCharteredAccountantsinEnglandandWales).Theviewsoftheseintervieweesneedtobeseeninthecontextoftheirorganisation’soverallrelationtothesector,andwhererelevantwehavetriedtogiveanideaofthiswhencitingspecificcommentsbelow.

Thechartspresentedinthissectionsummarisedatafromeachofthetwoonlinesurveys.Onesurveywascompletedbyprofessionalbodiesandtheotherwascompletedbybanksandbuildingsocieties.Todistinguishonefromtheother,wehaveusedtheabbreviationsPB(for‘professionalbody’)andFirm(for‘banksandbuildingsocieties’)inthecharttitles.

4.1 Generalobservations4.1.1 Theprofileoftheprofessionalbodies1. Theresultsinthissectionrelatetoissues2and3inthecentralfindings.

2. Takenasawhole,theprofileoftheprofessionalbodieswithinthebanksandbuildingsocietiesislow–notjusttheCharteredBankerInstitute(formerlytheCharteredInstituteofBankersinScotland),norjusttheifsUniversityCollege(formerlytheCharteredInstituteofBankers),butallthebankingrelatedprofessionalbodies.Oneintervieweefromthefirmssaid:

Soworkingwiththebusiness….Ithinkit’sfairtosay,notwithstandingthefactthatIworkedatthatpointfor[nameofemployer]for-Idon’tknow-eightyears,thatIprobablydidn’treallyknow,forexample,whatthe[professionalbody]didforus.Didn’treallyknowhowweengagewiththem.Wouldn’tknowhowtoengagewiththem.SoIthinktheirprofileislow.

AnumberofbankandbuildingsocietyintervieweeshadthemselvespassedCharteredInstituteofBankers’examsinthe1980sbutnotedthatthisrequirementonentryintothesectorhadfallenawayfromthe1990sonwards:

Isuspectthatstartedtodisappearprobablyintheearly-tomid-nineties.ItbecamelessandlessimportantforpeopletohavethatprofessionalqualificationanddisappearedIguesscertainlybytheendoftheninetieswhenitjustwasn’tanissuethatpeopletalkedabout.

Itwassuggestedthatthiswaspartlyduetothedevelopmentofasalesandmarketingculturewithinfirms,asopposedtooneofprofessionalservice.Somesuggesteditwasbecausetherearesomanyprofessionalbodies.

Anotherconnectedreasonwasthatthereisalackofagoldstandardqualificationwhichcanberecognisedinthewaythatanactuarialoraccountingqualificationcanberecognised(issue2inthecentralfindings).Onebankingandbuildingsocietyintervieweecommented:

38

Thinkingpersonally,thereneedstobesomesortofchecksontheprofessionalbodies.Sothatthey’renotjustaboutsellingqualifications.

3. Thisviewwasmirroredinthebanking-relatedprofessionalbodyinterviews:manyintervieweestalkedaboutthewayqualificationsusedtobeanexpectationforanyonelookingforacareerinbanking,butceasedtobesuchfollowingthe‘bigbang’inthe1980s,withacommensuratedrop-offinmembershipofprofessionalbodies.Withintheprofessionalbodies,thereisperhapsasensethatthependulumisbeginningtoswingbackintheotherdirection,butcurrentlytake-upofqualificationsstillappearsverypatchy.

4. Figureoneshowsbankandbuildingsocietysurveyrespondents’estimatesoftheproportionofemployeesintheirorganisationwhohaveabankingqualification.

FIGURE1

5. Onthewhole,bankandbuildingsocietyintervieweesdidnotknowtheproportionoftheiremployeeswhohadprofessionalqualifications,asthequotesbelowindicate.Inmostorganisationstheyestimateditwaslessthan25%,sometimesmuchlessthanthat.Oneortwosuggestedthatintheirorganisationitmightbemorethan50%.Thiswasgenerallyinsmallfirms.Ontheotherhand,somesmallfirmsthoughtonlyabout10%.Alikelyexplanationforthevariabilityofmembershiplevelsinsmallfirmsisthattake-upisdrivenbythepersonalenthusiasmoforganisationalleadersinsomecases.

I’llbehonest,weneedtogetbetteratthisasmostofourcompetitorsdo.Thatsortofinformationisprettytoughtogetholdof.Iwouldsay,itwouldnotsurpriseme,probablyabove50%.ButIcouldbewrongthere.

That’sadifficultquestion,andImayhavetogetbacktoyou.

Muchlower,alowproportionIwouldthink.Itverymuchdependsonwhichpartofthebankyou’reworkingin.….lessthan20%perhaps?Yes.

Itwasnotablethatmostintervieweesreportedthattheirorganisationdidnotkeepanyrecordofthisinformationintheirpersonnelfiles.Asonecommented:

64

1

Toyourknowledge,roughlywhatproportionofemployeesinyourorganisationhavecompletedaqualificationinbanking?

(Firmsurvey)

About0-25% About26-50% About51-75% About76-100%

39

ThereasonI’mguessingisthatwedon’tactuallyholdthatinformationcentrallysoI’mnotsurethere’sawayofmetellingyouthat....Soit’saninterestingquestion,attheheartofthisconversationreally.Wedon’tinsistthatpeoplearemembersofanyprofessionalorganisationsowedon’tcapturethatessentially….

6. Intervieweesknewthatinregulatedareas,forexample,wherestaffweresellingfinancialproducts,someprofessionalqualificationwasrequired,thoughthisdidnotnecessarilyentailmembershipofaprofessionalbody.Infact,oneorganisationnotedthat,althoughtheydidengagequitealotwithaprofessionalbody,thiswaspurelyatransactionalrelationship.Inotherwords,thebodywasasupplierofaqualification,buttherelationshipwasnodeeper(seealsoissue4inthecentralfindings).

7. Thereisperhapssomethingofa‘chickenandegg’probleminthattheprofessionalbodieswouldbebetterknowniftheirqualificationshadmoregoldstandardstatusandthequalificationswouldhavehigherstatusifthebodieswerebetterknown.Butthereismoreto‘goldstandard’statusthantheproviderbeingwellknown;itdependsonthequalityofthequalificationaswell.

Onebankingandbuildingsocietyintervieweecommented:

Sowewouldbutbecausetheprofessionalbodies,apartfromthespecialismslikelawandfinance,havefallensofardownpeople’sshoppinglists,notmanypeoplethinkaboutit.Thatmightbeourfault,itmightbetheprofessionalbodies’fault,itmayjustbethewaythingshavedeveloped.Butaspartofthemovetoustryingtogetbankingbacktobeingaprofession,weneedtodosomethingaboutit.

8. Somebankorbuildingsocietyintervieweesraisedthequestionofwhatismeantbyaprofessionalqualificationinthesector.Thussomethoughtthatsimplyhavingadegreemightcountashavingaprofessionalqualification.Butthentheyrealisedthatwithinbanksandbuildingsocietiestherelationofadegreetoaprofessionwasquiteunlikethatinmedicineorengineering,forexample,wherethedegreewouldberatifiedbyaprofessionalbodyasthefirststageofbecomingaprofessional.Bycontrastthedegreesincorporate/investmentbankingmightbeinsubjectslikeHistoryorEnglish,sohavenospecificcontentdesignedforthebanksandbuildingsocietiessector.Andonenotedthat‘wedon’tcountdegreesasprofessionalqualifications’.Thissuggeststhatthenotionofaprofessionalqualificationneedsclarifyingforbanksandbuildingsocieties.

Thefrontofficegroup--Iwouldsaythat90%ofpeopleattheveryleasthaveaprofessionalqualificationofsomekind.Actuallythat’snotquitetrue.Theywouldhaveadegreeandpotentiallyahigherdegree.Itdependswhatwemeantbyprofessionalqualification.……Inwhichcasemuchlower.Misinterpretationonmypart.

9. Becausequalificationsare(withexceptions)notmandatory,professionalbodiesappeartobeinthepositionofhavingtoselltheideaofprofessionalqualificationstobanksandbuildingsocieties,aswellsellingastheirownspecificqualifications.Thissuggeststhatstandards,andapproachestoprofessionaleducation,includinginethics,aretoagreatextentdrivenbybanksandbuildingsocietiesasthemorepowerfulgroupinwhatappearstobeapredominatelytransactionalrelationshipbetweenthemandprofessionalbodies(seeissue4inthecentralfindings).

10. Ontheotherhand,somebankingandbuildingsocietyintervieweessawtheimportanceofmaintainingstandards:

40

Theyneedtobeuptodate,forwardthinking.Havingsaidthat,I’menoughofadinosaurtosay,thatdoesn’tmeanyouthrowoutallthegoodstuffyou’vegot.Itneedstobebasedongoodstandardrigorousfoundations,butitneedstoreflecttheworldthecolleaguesseenowadays.

Thereweresomeexampleswithinthebanking-relatedprofessionalbodyinterviewsofprofessionalbodiestakingafirmerline,settinghighstandardsandchallengingbanksandbuildingsocietiestoaspiretothese.Theseintervieweesclearlysawthisasmarkingouttheirprofessionalbodyasdistinctfromtheothers.Forexample,oneinterviewee(PB)statedthat:

Ifyoudon’thaveinyourmindthatyou,intheleast,haveanequalstatustotheseniorbankers,thenyou’renotgoingtogetanywherewiththesepeople.OneofthethingsI’veobservedabouttheinstitutes…peoplearevery,verytimid.Theydowhatthey’retold.Therearesomebankersouttherewhofinditabitstrangethatnon-bankerslikemyselfcomealongandsay‘guys,you’renotdoingitproperly’.

11. Anotherintervieweenotedthattheirprofessionalbodyhadalsofacedresistancefrommembersonoccasion:

Thequestionyoushouldalwaysaskis‘doesthisbenefitthepublic?’Itshouldnotbeeverinthetradebody’sspaceofsimplybackingmembers...Theevidenceofthatwasduringtheretaildistributionreview,wearguedinfavouroftheraisingofqualificationsacrosstheboardwhichalotofourmembersreallydidn’tlikeandfoughtveryhardagainst.

4.1.2 Themissionandroleoftheprofessionalbody12. Weaskedbanking-relatedprofessionalbodyintervieweeswhattheirprofessionalbodysawas

itsmission.Ingeneral,answershadtodowiththeprovisionofeducationandqualifications.Oneintervieweetalkedaboutidentifyingandfillingtheskillsgapsthatexistinthesector.Someintervieweesspokeaboutraisingormaintaining‘standards’,eitherofcompetenceorethics.Oneintervieweementionedpublicengagementandraisingtheprofileofbankingasaprofession.Wewereparticularlyinterestedin‘bigpicture’responses.Responsesofthiskindwererelativelyfew,andtendedtocomefromthoseprofessionalbodieswhoseremitiswiderthanthebankingsector.Theyincluded:

o ‘Creatingacultureofriskawarenessinbusiness’

o Contributingtothepublicgood

o Fosteringasenseof‘stewardship’inthesector

13. Whenaskedabouthowtheymightseektoexpandtheirreach,professionalbodiesrevealedthemselvesgenerallynottobeinterestedindiversificationbutinconsolidationwithinthepartofthesectorinwhichtheyarealreadyactive.Thisisprobablynotsurprisinggiventhelowcoveragecurrently–itwouldmakesenseasabusinessmodeltoconcentrateonincreasingmembershipintheareainwhichonealreadyhasanoffer,ratherthantofocusresourcesonstartingfromscratchinanewarea.

14. Someofthebankandbuildingsocietyintervieweesexpressedconfusionabouttheroleofprofessionalbodies.Oneintervieweeasked:

Aretheytheretosupportindividualsortheindustrysectororhowbusinessesdevelop?Ithinkthat’smaybealittleconfusedontheirpurposeatthemoment.

41

15. Anotherintervieweesuggestedthatthereisaviewofprofessionalbodiesas‘outsiders’,asopposedtobeingpartoftheindustrythemselves.However,oneintervieweecouldseeimportanceinprofessionalbodiescreatingaprofessionalidentityandacommonlanguageforthesector:somethingtobeproudof.Thiscommonlanguagewouldmeantherewerethingsonecouldtakeforgranted,thateveryonecouldbeexpectedtounderstandevenastheymovedaboutthesector.

Somewereabitscepticalastowhethertheprofessionalbodieshadtherightvision:

Idon’tthinkI’maversetothemplayingagreaterrole.[WhatIwantthemtodo],istoshowamorevalueaddedroleinthesectorratherthanjustwantingtobeabiggerplayerinit.WhatyoudogetispeoplewhoareoftenkeentoparticipatebutIveryoftendon’tseethevalueaddedortheprofessionalismthattheyofferintheirdesiretobeabiggerplayer.

Andanotherintervieweefrombanksandbuildingsocietiespointedtowardsthekindofgoaltheywouldhopeaprofessionalbodywouldaspireto:

Professionalbodiesusuallytendtobefocusing,asaregulatoris,onconcreteskillsandknowledge.Thatdoesnotmakethem[thebankingemployees]fittotrade.Itmakesthemfittodothejobsothattheyknowhowtodoatradebut[doesnotgivethem]amind-set.Whateverybody,theregulators,theorganisations,arewrestlingwithis…culture….Establishaculturewherepeoplewillmaketherightdecisions,speakup,andtherearewaystodothatbuttheexpertiseinthebankstobeabletodothatisminute….

4.1.3 Thecultureofbankingandbanks16. Mostbankandbuildingsocietyintervieweesagreedthatthecultureofbankinghaschanged

drasticallyovertheyears.Therewasatbestatentativeindicationthatethicalculturemaybebeginningtoimprove.Oneintervieweenotedthat:

Banksarelargeandhavecommandandcontrolstructures,sothere’sanabsenceofatonefromthetopandit’sdifficulttoseewhereyouwouldgetachallenge.

Therealchallengeofabankinthefuturewithaproperculturewouldbethatthey’drecogniseatanearlystagethatPPIwasanaccidentwaitingtohappen,andratherthansimplysitoffitwiththeprofitsuntil…somebodyoutsidesays‘stop’,somebodyinternallysaystakeanactiontoforgoshorttermprofitsforlongtermreputationalgain.Theremaywellbethosethingsstartingtodevelopinbanks.Atthemomentwedon’tknowbecausewe’restilldealingwiththelegaciesofpastthingsandfinesetc.Culturallyitmaybesomeofitmayhavechanged.

17. Therewassomediscussionofthewayculture,conceptualisedas‘thewaythingsaredonearoundhere’,istransferredinbanks.Whereas,inthepast,organisationscouldrelyonlongstandingtraditionstoinculcateasetofvaluesandapproachesintheiremployees,therewasaconcernthatthishasbeenlost.Initsabsence,newwaysofrestoringethicalculturesneedtobeestablished,whichcouldincludeincreasedprofessionalisation.Mostintervieweeswhoexpressedanopinionthoughtthatbanksarecurrentlyalongwayfromacultureofprofessionalism.

Ijoinedagoodoldfashionedbankthathasbeenaroundfornearly300years.Actuallythepeoplearoundyou,infusedyouwithalotofwhatwewerelearningatthetime,thehistory,theculture,theriskmanagementaspectofwhatyouweredoingforclients,managing

42

money,puttingmoneytogooduse.Iwouldsaypartoftheeducation,partoftheprofessionaldevelopmentwasjustbeinginagood,oldorganisationwithveryqualifiedpeoplearoundyouwithenormousexperiencewhosejobitwastoimpartthatknowledgeandculturetoyouasayoung,traineebanker.

Asnotedaboveatpoint15,someseniorintervieweesinbanksandbuildingsocietieswerescepticalthatthefirmsthemselveshavetheexpertisetoaddressthisandwerelookingtoprofessionalbodiestohaveavisionwhichwouldembracethischallenge.

4.2 Professionalqualifications4.2.1 Thevalueofprofessionalqualifications18. Overall,intervieweesfrombanksandbuildingsocietieswerereluctanttoendorsethevalueof

theprofessionalqualificationscurrentlyavailable.Forexample,onecommentedasfollows:

Iftherewasamechanismthatwasasafeguarantorthatsomebodyhadthatcapabilityandcompetence,Ithinkwewouldbeinclinedtouseit.Idon’tthinkthemechanismsthatexistarereliableindicatorsthatthatisthecase.

Onemajorreasongivenforbanksandbuildingsocietiesnotvaluingqualificationswasthesheernumberofqualificationsavailable.Somebankandbuildingsocietyintervieweessaidthat,eventhoughtheyhadresponsibilityforprofessionaldevelopmentofstaff,itwasnotpossibleforthemtokeepabreastofallthequalificationsavailableand,inparticular,oftheirrelativeworth.Severalintervieweesnotedtheneedformoreclearlydefinedpathwaysbetweenprofessionalqualificationsandforprofessionalbodiestodomuchmoretohelpwiththat(see‘pathwaysandframeworks’below).Intervieweesnotedthatitisnotjustprofessionalbodieswhoofferqualifications,butalsoacademicinstitutionsandindependenttrainingproviders.Overall,thereappearstobeaproliferationofqualificationsinthesector:

Idefinitelythinkit…wouldbehelpfulforbankingtohaveitstreamlined,andthenitwouldhavetobereally,reallyclearwhatthestandardsactuallyare.

19. OnefirmreportedthatithadrespondedtotheproblemoflackofcalibrationbypartneringbothaprofessionalbodyandaUniversitywiththelatteraccreditingthelevelofaqualification.

20. Whenaskedabouttheviewsofleadersinorganisations,somebankandbuildingsocietyintervieweesfeltthatleaders,oratleastseniorleaders,werenotmuchinterestedinqualifications.Again,giventhenumberofqualificationsavailable,leaderswouldbeunlikelytobeawareofthematanylevelofdetail.Inlargerorganisationssomenotedthattherewouldbeseverallevelsofleaderssothatdifferentanswerswouldapplyfordifferentlevels.However,abankorbuildingsocietyintervieweeinalargefirmwasconfidenttheywerevaluedbyleaders:

SoIwouldsaythatifyoutalkedtothemostseniorindividualsintheorganisation,Ithinktheywouldlargelybeadvocatesofprofessionalqualifications…ifyouwanttodriveculturalchange...[and]there’llalsobepeopleinthatgroup[mid-levelleaders]whowouldbeadvocatesbecausetheyseeitasaninvestmentinthem,theyseeitasbeinglike‘Iwanttofeelproudagain’…

Andanotherseniorbankorbuildingsocietyintervieweecommented:

Ithinkit’scoretoleadershiptoshowtopeopleactuallytherearestandardsthatneedtobemetandyouneedtotestyourselfagainstthosestandards.That’swhereprofessional

43

qualificationsshouldcomein.Sadly,atthemomentIdon’tthinkthey[professionalqualifications]do[comein]enough,butitistheleadersofbusinessthatshouldbesayingthat.

So,wherequalificationsarevalued,thismaybetheresultofseniorleadershavingprofessionalisationontheiragendaandthensuccessfullydrivingthisthroughtheorganisation.

21. Somebankandbuildingsocietyintervieweesexpressedaviewthatqualificationswerenotsufficientlyrelevant,specificorup-to-date:

AlsoIthinktheprofessionalbodiesthemselvesaregoingtohavetomakesureandgainthetrustoftheinstitutionsthattheyhavemovedwiththetimesandthey’reembeddingthefuturethoughtofwhatpeopleneedinfiveortenyears’timenow.

Somementionedthatbankersnowfrequentlychangecareerpaths,andthatthereisaneedforqualificationpathwaysthatallowforthat.Theneedforqualificationstoberelevant,informedandup-to-datewasalsoaconcerncommonlyexpressedbyprofessionalbodies,includingbankingprofessionalbodies.Therewasaninterestingcommentfromoneinterviewee(fromastakeholderorganisation)identifyingapossiblereasonforqualificationsbeingperceivedasbehindthetimes,whichwasthatusingacademicpublicationsinqualificationsyllabuses‘anchorsyoufivetotenyearsbehindthecurve’,andthatbythetimegoodacademicpublicationshavebeenpublishedandbeenpickedupbyprofessionalbodies,thesectormayhavemovedon.

22. Perhapsunsurprisingly,intervieweesfrombankingprofessionalbodiestendedtothinkthattheirqualificationswerevaluable.Ontheotherhand,theydidnotalwaysthinktheirvaluewasrecognisedbybanksandbuildingsocieties.Severaloftheseintervieweesidentifiedoneofthebiggestdriversforfirmswhodidvaluequalificationsasbeingregulatorycomplianceandthewishtoavoidfines.

23. Oneinterviewee(fromabankingprofessionalbody)identifiedagrowingawarenessoftheneedtosellresponsibly,andaperceptionthatqualificationscanhelpdevelopthistendencyinstaffinvolvedinselling:

Ithinkagrowingdemandiscomingfromthefactthatbanksarestartingtorealisethattheyhavetosellresponsibly,sonotjustaboutsellingtherightsolution,it’ssellingitintherightway.AndI’mcertainlyintheprocessoftalkingwithanumberofthelargebanksabouthowtohelpthemaddprofessionalismtothesalesprocess,aswellasthemoremundanecomplianceissues.

24. Whiletheprimarydriversforbanksmaybeprofitabilityandavoidingregulatorycensure,oneprofessionalbodyintervieweereportedsomesuccessinbroadeningtheinterestsoforganisationsoncetheyhadafootinthedoor.

Ithinktherearetwodrivers.ImeanthebanksarealargeconsumerofourqualificationsandIthinktherearesomebankswhichtheprimarydriverisbettersellingintermsofprofitabilitysosellingasolutionratherthanabunchofproductswhichmayormaynotbesuitable.Andthat’softenwheretheconversationstartsbutagain,asyoustarttoworkmoreclosely,youcanobviouslyopenupeyesto…morethingsthattheprofessionalbodyisinterestedin,aroundstandardsandthings…Ithinktherearehugeareasofdifficultyaroundthe

44

compliancesideandhowyoukindofbringstandardsintothat,andIdon’tthinkthebanksdothatparticularlywell.

25. Theassumptionamongthemajorityofintervieweesfromallgroupsappearedtobethatthecontentofqualificationshadtobedrivenbybanksandbuildingsocieties.Asabankorbuildingsocietyintervieweeputit:

That’sright.Theyneedtotakeastepback.Theindustryneedstobesayingtoprofessionalbodies,‘thisiswhatwewantyoutodo.Areyoupreparedtodoit?Ifnot,we’llfindsomeonewhois’.

Thisisunsurprisinggiventhatqualificationsarenotcompulsory,butalsopointstowardsthelackofa‘gold-standard’qualification(seeissue2inthecentralfindings,andthequoteinpoint18above).Ifsuchaqualificationexisted,theprofessionalbodieswouldhavegreaterlatitudetosetcontentthattheythoughtwasvaluable.

Sotherewassomeimpressionthatprofessionalbodiesseethemselvesassupplierstobanks,withbanksascustomers,whichcouldleadtoanassumptionthat‘thecustomerisalwaysright’(seeissue4inthecentralfindings).Thiscontrastswithotherprofessions–e.g.accountancy,law–inwhichstrongerprofessionalbodiesareabletohaveastrongerroleindeterminingwhatconstitutesagoldstandardprofessionaleducation.However,wedidnoteinsection4.1.1thatsomedoseetheneedforprofessionalbodiestostandfirmlyfortheirstandards.

26. Onerevealingcommentbyabankingprofessionalbodysuggestedthat,whilesomebanksareveryhappytopublishthefactthattheyareworkingwithprofessionalbodies,seeingthisasaPRwin,othersarereluctanttodoso,suggestingthattheyseeworkingwithanexternalorganisation–perhapsparticularlyonissuesofethicsandculture–asasignofweakness.

Thegreatestdifficulty…isthatyoumightgoandsee[a]householdnameandthey’reveryhappywithyou,butsay‘youcannotuseournameasarecommendationtosomebodyelse’.Thatwassomethingweraisedinaneditorialarticleinourpublicationquiterecently.AsaresultoftheFCAsayingthey’reabandoningtheirculture-themedexaminationofbanksthen,we’redoingworkwithbanks,whyareyousoreluctanttotellanybodywhatyou’redoing?Ithinkit’sthattheyseeitasadmissionofweakness.

27. Asanindicatorofthevalueplacedonprofessionalqualificationsbybanksandbuildingsocieties,weaskedaboutthesupportprovidedtoindividualswhoareworkingtowardsaprofessionalqualification.Nearlyallbankandbuildingsocietyintervieweessaidthattheirorganisationdidprovidesuchsupportinsomeformorother.Manyqualifiedthisbysayingthattheywouldonlyprovidesupportforobtainingqualificationsthatarerelevanttotheindividual’srole.Somesaidthattheonuswasontheindividualto‘makeacase’forsupport.Othersreportedthattheirorganisationhasapolicywhichsetsoutwhichqualificationstheywouldorwouldnotsupport.Overallthereappearstobealotofvariationinboththefinancialsupportgiventothoseseekingqualifications,andtheamountoftimeoffallowedforstudy.

28. Smallerorganisationsmaybeworriedaboutfundingpeopletogetaqualification,andthenlosingthem:

Thisisfairlyobviousbutit’sanimportanttruthanditcertainlyaffectsthewaywesupportqualifications…iftheorganisationissupportingtheindividualtherehastobeabenefittothe

45

individualandtheorganisation.Thetruthis,onceanindividualgetsaqualification,iftheythenleave,thequalificationstayswiththem….

Forthisreason,anumberoffirmshavea‘claw-backclause’onfundingifanindividualleavessoonaftergainingaprofessionalqualification.Butevenlargeorganisationsreportedthattheyhavelimitedbudgets,andmightconsidertheywouldgetabetterreturnontheirinvestmentbyspendingthemoneyonthingsotherthanprofessionalqualifications,forexample,otherformsoftraining.Onesurveyrespondentfromabankorbuildingsocietystatedthat:

Inachallenging,lowinterestrateenvironmenttherewillcontinuetobecostpressuresonProfessionalQualificationbudgets.Inevitablyprioritywillbegiventostudythatisaregulatoryrequirementorwithoutwhichacolleaguewillbeunabletocarryouttheirjob.

29. Theresponsesfrombanking-relatedprofessionalbodiesalsoindicatethatthesupportprovidedispatchy,whichcanbeseenasanindicatorthatbanksandbuildingsocietiesdonotconsistentlyvalueprofessionalqualifications.Someareasreportedconsistentsupport(e.g.compliance,risk)perhapsindicatinggreatervalueplacedonqualificationsintheseareas.

Iwouldhavesaidit’smorethanpatchyasfarascompliance.Literallyallregulatedentitiesnowhaveontheirradar…Thenumberonebusinessrisktobanksthesedays,andthere’salotofresearchonthat,isinfactcompliancerisk.Theyarewellawareofthat.Oneofthesolutionsobviouslyistraining.Iwouldsayit’snotsomuchpatchy.Almostallbankingorganisationsarewellawareoftrainingandeducationandqualificationsinparticularinthisfieldnow.

30. Professionalbodiesalsoreportedalargedifferencebetweenindividualbanksinrespectoftheamountofsupportprovided.Onekeydifferenceseemstobethatinsomeorganisationsprofessionaltrainingisdrivencentrallyandhasacentralbudget,whereasinothersitislefttothediscretionoflinemanagersandfinancialcontributionsmustcomefromdepartmentalandteambudgets.Inthelatterorganisations,take-upofqualificationswasreportedasbeingmuchpatchier.Thisviewwasalsocorroboratedbysomeofthebankandbuildingsocietyinterviews.

4.2.2 Thespecificbenefitsofhavingqualifications31. Overall,theresultsfromboththesurveysandinterviewssupporttheconclusionthat,however

professionalbodiesmayseethemselves,banksandbuildingsocietiesseethemmuchmoreasprovidersoftechnicalskillsandnotsomuchascontributingtoethicsandculture.

32. Thechartbelowshowswhatsurveyrespondentsfrombanksandbuildingsocietiesperceivetobetheadvantagesofmembershipofaprofessionalbody.

46

FIGURE2

Aparticularlystrikingresulthereisthatlessthan25%ofrespondentstothebanksandbuildingsocietiessurveythoughtthat‘toimprovetheirethicalstandards’wasanadvantageofmembershipofaprofessionalbody,andlessthan40%saw‘toearnthetrustofthepublic’asanadvantage.

33. While‘toimprovetheirtechnicalskills’,scoreshighlyintheabovechart-over90%-commentsenteredintothefreetextboxaccompanyingthisquestionsuggestthateventhismightnotbeseenuniversallyasamajoradvantageofprofessionalqualifications.Forexample,oneparticipant,answeringonbehalfoftheretailorconsumersector,andwhotickedmostoftheadvantages,commentedthat,‘whilsttheseareadvantagestheyarequiteminori.e.notparticularlysignificant’.

34. Interviewrespondentswhoansweredthattherewerenoadvantagestomembershipwereaskedtoexplaintheiranswer.Onlyoneresponded,explainingthat,‘There is no common "standard" that is recognised/adhered to.’

35. Resultsfromtheinterviews–bothbankandbuildingsocietyandbanking-relatedprofessionalbody–alsosupportthisgeneralpicture.Amongbanksandbuildingsocieties,therewasatbestmixedendorsementofprofessionalqualificationsasadvantageousingeneral,andmoreendorsementofthemasanaidtotechnicalcompetencethantoethicalawareness,behaviourorreputation.Onesaid:

I’msuretheremustbe[advantagesinhavingprofessionalqualifications].We’veseenvalueintheunderstandingourcolleaguesdisplayifthey’vesatandpassedtheFCAexamstobeabletoconductbusinessactivities.

Anothercommented:

Theethicalside,notconvincedby.Itverymuchdependsonthequalificationyoudo.Onwhat’scovered.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Toimprovetheirtechnicalskills

Toimprovetheirethicalstandards

Toimprovetheirpersonalreputation

Tohaveaccesstotheservicesprovidedbyprofessionalbodies

Toearnthetrustofthepublic

Asanopportunityfornetworking

What,currently,aretheadvantagestobankersofbeingmembersofabankingprofessionalbody?(Firmsurvey)

Total'yes' Total'no'

47

Evenontechnicalcompetence,however,somebankandbuildingsocietyintervieweessaidthatprofessionalbodyqualificationsdonothaveahallmark,andsoarenotusedasanindicatorofqualityofajobcandidate,forexample.

Itdoesn’tcarrythathallmarkthatdifferentiatesagoodpersonintermsofcapability….That’soneofthebiggestproblemswehavewithit.

Othersnotedthatpeoplecanacquiretechnicalskillsinotherways.

36. Somebankandbuildingsocietyintervieweestalkedaboutprofessionalqualificationspotentiallyhelpingwithunderstandingbanks–andwithprovidingacommonlanguageorcommonunderstanding:

Ithinkthereismeritinactually‘whatisbanking’initsbroadestsense.Oneofthethingswewouldseeasatestofcompetenceis‘doyouunderstandhowabankmakesmoney?’Thereissomethingaboutthatabsolutely.

Anothersaid:

Tohaveabaselevelofcommonlanguage,commonunderstanding,commonframeworks,sothatyoucouldbringthattobearalreadyinthebank,thenyoucouldspendmoretimelearningtheXwayofdoingsomething,orhowtomakeitbetteretc.Soitwouldabsolutelybeveryhelpful,notjustfromtheregulatory[pointofview]buthowtospeedthingsupandgivepeopleacommonplatformandlanguagetomoveforwardwith.

37. Evenamongprofessionalbodyinterviewees,fewpeopleidentifiedethicsortrustworthinessasamotivation.Responsestendedtoemphasisetechnicalcompetenceorprofessionaljudgmentratherthanspecificallyethicalskillsorunderstanding.

38. Intheinterviews,themostcommonlycitedmotivationforgainingaqualificationwasforcareeradvancement,thoughthiswasnotuniversallyendorsed:quiteafewreportedthatitwasnotinfactrequiredforadvancingintheirorganisation.Oneviewexpressed(byabankorbuildingsocietyinterviewee)wasthatqualificationsweremorehelpfulforcareeradvancementinlargerorganisations:

Ifyou’rewithasmallorganisation,Idon’tthinkitdoes[help]becausethereisverylittlecareerprogression.

Somefeltitdependedonwhatareatheindividualwasworkingin,distinguishingcounterstafffromsomeotherareas,especiallythosewherethereisaregulatoryneed.Sosomefeltqualificationswereofvalueforsomelevels,butnotothers.Somebankorbuildingsocietyintervieweessaidthey(i.e.thefirms)coulddomore:

Onethingwecoulddoisrevisitourpolicyonhowpeoplecanprogresswithintheorganisation…..Ithinkweneedtobesayingtothem,‘yournextstepis…’andthatstepisaprofessionalqualification.Ithinkwecouldsetanexamplethere.

39. Thismixedviewwasmatchedbytheviewsofsurveyrespondents,particularlythoseinbanksandbuildingsocieties.Bothprofessionalbodyandbank/buildingsocietyrespondentswereaskedspecificallyabouttheusefulnessofprofessionalqualificationsforcareerprogressioninbanking.Theresultsaresummarisedinthetwochartsbelow:

48

FIGURE3

FIGURE4

40. Financialriskmanagementandcompliancewerebothnotedasareasinwhichemployersoften

expectpeopletohavespecificqualifications,thoughtheyarenotaregulatoryrequirement.Theprofileofbothareasappears,unsurprisingly,tohaveincreasedgreatlysincethecrisisof2007/8.

41. Twoprofessionalbodyintervieweesmentionedbeingpartofa‘communityofinterest’asanimportantbenefitofmembership.Notably,bothoftheseintervieweescamefromestablishedprofessionalbodieswithaRoyalCharter.

Insectorswherethereisastrongprofessionalbody,you’llfindthatthatbodyalsoactsasaportofcallforthoseindividuals.Soifthey’vegotaproblemwiththeiremployerorethicalstandards…you’llfindthatthey’vegotethicaladvicelinestosupportthem.Inmyexperiencethatisnotsomethingyouassociatewiththebankingindustry.

However,thisideawasalsopickedupbyabankorbuildingsocietyinterviewee:

0

1

9

4

2

1Notatalluseful

2

3

4

5Veryuseful

Howusefuldoyouthinkhavingaprofessionalqualificationinbankingisfor careerprogressionin yourorganisation,

currently?(Firmsurvey)

3

8

7

10

7

1Notatalluseful

2

3

4

5Veryuseful

Howusefuldoyouthinkhavingaprofessionalqualificationinbankingisfor careerprogressionin banking,currently?

(PBsurvey)

49

Icanseethevalue…thatyouhave[a]bodythatsays‘here’sthestandards,here’sthequalificationsyouhavetohavetobeabletopracticeinthisarena,andhere’stheongoingwayofworking.Thereisastrongsenseofcommunityandbelongingandprofessionalismandwe’reallinitbecauseofthis.’

4.2.3 Qualificationsandregulatorycompliance42. Severalintervieweesfrombanking-relatedprofessionalbodiesidentifiedareasinwhich

qualificationsarerequiredbylaw.Theseincludemortgageadvice,financialadvice(throughtheRetailDistributionReview–severalprofessionalbodiesaresetuptoprovidestatementsofprofessionalstanding)andotherspecificfunctionssuchaslawandaccountancy.Unsurprisingly,mortgageandfinancialadviceareimportantareasforbankingprofessionalbodies.

43. Theseniormanager’sregimedoesnotrequirepeopletobeprofessionallyqualified,butitdoesrequirepeopletodemonstratethattheyarecompetent.Severalprofessionalbodyintervieweesstatedthataqualificationwasasimplewaytodoso.Butitwasdifficulttogetaclearviewofhowsuccessfulprofessionalbodieshavebeeninlinkingtheirqualificationstothisregulatoryrequirement.OnebankorbuildingsocietyintervieweecommentedthatifPBscouldmakesuchlinksthatwouldbehelpful:

Whatwouldbequitehelpful,Ithink,andthiswouldbevalueaddedratherthanwhatweneedtodo,isprobablyhavingdonesomeofthejoiningupforus.SohowdoesyourqualificationconnecttowhattheFCAistalkingaboutrightnow?WhatdoesitmeaninconnectiontoSMR?Whatdoesitmeaninconnectiontothecertifiedregime…?Sothere’sprobablyabitof‘howdoyoupackageaproductforyourcustomer?’

44. Professionalbodiesseethecertificationandseniormanagers’regimesasanimportantsourceoftake-upofqualifications.Itdoesnotappear,though,thatthereisaframeworkofqualificationsspecifictotheregime.Onebankingprofessionalbodyintervieweenotedthatthecertificationandseniormanagersregimesarehelpfultothemassuppliersofqualifications:

Theregulatoryframeworkthat’sbeinglaidoutatthemomentlendsitselfquitenicelytothatbecauseitincreasestheimportanceoftrainingandcompetencegenerallywithinthebankingindustry.

45. However,anotherbanking-relatedprofessionalbodyintervieweenotedthatthefocusonregulatorycompliancecouldleadtoaconcentrationoncompliance-relatedqualificationsattheexpenseofmoregeneralqualifications.

Thebanksdon’twanttospendmoney,youknow,theyhaveafinitebudgetwhichneedstobespreadacrossanumberofareasandtheywanttogetasmanypeoplethroughregulatorytypequalificationsuntiltrainingroundcomplianceandthey’llhaveasmallerpotavailableforeverythingelseandthatdoesn’tnecessarilyincludeCPD.

46. Anotherbanking-relatedprofessionalbodyintervieweenotedthatprofessionalbodiesgenerallyhavefounditdifficulttodevelopqualificationsthatadequatelycoverregulatoryrequirements,duetothefastpaceofregulatorychange,andalsonotedthatprofessionalbodiesmayhavebeenlesssuccessfulindevelopingtrainingthatwouldhelpwiththe‘softerside’ofregulation.

Itwouldbethesoftersideofregulationandcustomerrelationshipsthattypicallyarecatalysedbysomeformofregulationsuchastreatingcustomersfairlyortreatingcustomers

50

appropriatelyinvulnerablecircumstances.Thatisanareawheretherehasbeenalotlessthinking.Intermsofthemorehardedgedlegislativeandregulatorydevelopmentthere’stypicallyabitofalag.Giventhatoverthepast7/8yearsthere’sbeenunprecedentedlegislativeandregulatorychange,themembershipbodieshavefoundittoughtokeeptheirqualificationscurrent.

47. Anotherbanking-relatedprofessionalbodyintervieweenotedthatco-ordinationofprofessionalbodies’CPDactivitieswouldalsohelpthemtobemoreeffectiveinmeetingtherequirementsofregulatoryregimes.

AnotherelementofthisisaroundCPDandIsupposeinpartitlinkstotheIndividualaccountabilityregimeandtheseniormanagersregimetoperhapsalesserextent.Thereisarecognitionnowthattheindustryneedstobealotbetteratrecordkeepingintermsofpeople’squalifications,whatCPDthey’vedone.[IntheorganisationIusedtoworkfor]therewasoftenlimitedfollowupandcertainlynoconsistentrecordkeepingfromyear-to-yeartoactuallycapturethisandtomonitorhowthingsweregoing.Soitwasverymuch…downtoyourlocalmanager,howtheydealtwithitand…theproblemis…alotofpeoplehavebeenonsomegreattrainingdaysanddonesomegreatthings.But…allthoserecordsarelost.Whichisagreatshame,soIthink…aswellasallthesegreatqualifications,thereisaneedtolookatthewholeCPDpiece,bothintermsofthequalityofitandintermsofthebreadthofitbutalsointermsoftherecord-keepingsideofitandIthink…there’ssomeneedfor…co-ordination…betweenthememberfirmsandprofessionalbodies…becausetheproblemisifeachdoestheirownthing,independently,that’snotgreatbecauseit’snotveryefficient,andactuallyitwon’treallycoordinateverywellsoactuallyagreeingsomestandards,agreeingsomecommonapproachestothiswouldalsobeveryhelpful.

Insimilarveinabankorbuildingsocietyintervieweesaid:

Mysecondthoughtis;howdoesitsupersedewhattheregulatorisaskingustodo?Whatcouldaprofessionalbodytakeawayfromtheregulatorsandmakesimpler?Becausewegetmassiveoverlapswiththisregulatorwantingthisandthatregulatorwantingthat.It’sactuallythesamestuff,theyjustwantdifferentformatsorinanswertoslightlydifferentquestions.We’vespentalotoftimereportingtoaregulator.Soifaprofessionalbodycouldsimplifythat,tosay‘theregulator’sheretodothisandtheprofessionalbody’sheretodothis,andifyouadheretotheprofessionalqualificationframework,thatgivesyouthereallygoodbestpracticemethodologiesandproofsthatsaythatyourpeoplearehittingthisstandardandrequirementthatyoucanthenreporttotheregulator,’thenthatwouldbegreat.

4.2.4 Ageneralqualificationinbanking48. Weaskedallintervieweeswhethertherewasvalueinageneralqualificationinbankingas

opposedtospecialistqualificationsindifferentareas.Theoverallconsensusamongallintervieweegroupswascautiouslyinfavour,withsomeenthusiasticallyinfavourandsomeagainst.

Webeginbysettingoutviewsfromthoseinfavourandthennotequalificationsorreservationsthatwereexpressed.

49. Severalbankandbuildingsocietyintervieweesexpressedverypositivesupport.Onesaid:

51

CertainlywhatIhaveisageneralqualification,soitbasicallytouchesalmosteverythingabankdoes….AndIthinkitgivesyou,especiallywhenyou’reenteringtheprofessionitgivesyouthatbroadknowledgetothenhaveabetterideaofwhatyoumaywanttodoifyoudowanttospecialise….IfinditsousefulandalotofpeopleI’veworkedwithwhocameinsubsequentlyfinditvery,veryuseful.

Anotherequallyseniorintervieweecommented:

Ifyoucoulddefinewhattherightqualificationwas,tohaveabaselevelofcommonlanguage,commonunderstanding,commonframeworkssothatyoucouldbringthattobearalreadyinthebankthenyoucouldspendmoretimelearningthe[firm’s]wayofdoingsomethingorhowtomakeitbetteretc.Soitwouldabsolutelybeveryhelpful,notjustfromregulatorybuthowtospeedthingsupandgivepeopleacommonplatformandlanguagetomoveforwardwith.

Andathirdsaid:

Abankingqualification,Ithinkmyviewissomethingatafairlybasicintroductorylevelwouldbeofvaluetoeveryone.ButIthinkwe’dneedtobecleverhowwesoldittothem.

Andanother:

Ithinkthatmoregeneralviewofhowafinancialservicesbusinessworksandhowitallpullstogetherisimportant.

Finally,anotherobserved:

Theargumentaroundhavingacollectiveviewofwhatbanksareheretodoforsocietywouldbeareallygoodthing.BecauseIdon’treallythinkanybody’sclearonthat.

50. Withtheunsurprisingexceptionofthoseprofessionalbodieswhoareprovidersofgeneralistqualificationsatalllevels,mostintervieweesfrombanking-relatedprofessionalbodiesfeltthatthegeneralelementofqualificationswouldneedtobeatquitealowlevelinordertobemeaningful.

Someprofessionalbodyintervieweesnoted,however,thatthoseinveryseniorpositionsneededtohaveageneralunderstandingofbankingatahighlevel.Thisraisesthepossibilitythatanoverallframeworkofbankingqualificationsmightbemoregeneralistatlowerandhigherlevels,withincreasedspecialisationinthemiddle.

Myview,andI’vehadacareerinbanking,wouldbethatgenerallyasyouembarkonthatcareeryouwouldideallytakesomequalificationswhicharequitewideranging.Graduallyyouwouldfindyourareaofexpertiseandasyouprogresswouldbecomemorespecialised.

51. Inasimilarvein,thebankandbuildingsocietyintervieweesalsocommonlyobservedthattherewouldbeaneedforgreaterspecialisationatlaterstages.Onesaid:

Ithinkit’sofhugevalue….likelawyers….They’dhaveamoregeneralqualificationfirstandthenbecomespecialist.Ithinkit’sessentialbutit’snothappeningatthemoment.

Anothernoted:

[Tieredlevels],whichtherealways[were].Inthepastyouhadsomeonewhowas,Ithinktheexpressionwascertificated,youhadassociatesandyouhadfellows.Themovebetweenthelattertwowaslargelyaroundserviceandpositionintheorganisation.Butthere’dbenothingtostopthatbeinglinkedtoCPDforexample.…..Wherethebankingandbuildingsocietyprofessionlostitswaywasnotthinkingofitselfasaprofession.

52

Andathirdsaid,alsoreflectingontiersofqualifications:

Inestablishingaprofessionalbaseline,Ithinkthatissomethingtoconsider.Thenthequestionis,atwhatstagedoindividualstakeandcompletethosequalifications?Thatgoesbackto…banding.Sodependingonwhereyouenteranorganisation,yourpotentialforprogressionisbasedonyourabilitytoproceedthroughthoseexams.Itmaybethattheemployersaysifyouhaven’tcompletedthosewithinthreeyears,toatleastentrylevel,thenyou’llhavetoleavetheorganisationbecausewe’renotdeemingyouprofessional,oryoucan’tadvanceanyfurther.

Intermsofappropriatelevelsonesuggested:

AsyoucomeinthroughthedoorIthinkutmostimportancethatyourcorefoundationisset……Andthenthenextmostimportantplacefromapersonalviewwouldbewhenyou’reanewmanager…toinstillong-termbehaviours.

52. Oneintervieweefromabanking-relatedprofessionalbodysuggestedthatalackof‘bigpicture’understandingwasoneofthecausesofthebankingcrisis,withbankersworkinginsiloswithoutunderstandingtheknock-oneffectsoftheirwork,andultimatelytheeffectoncustomers.Ageneralqualificationwasidentifiedaspotentiallyeffectiveincounterbalancingthistendency:

Ithinkit’sabsolutelyvitalthatifwearedevelopingpeoplethatareintendingtorunbanksorrunlargepartsofbanksorevenpartsoflargebanks,whichyouknowarevitalpartsinthemselves,theyneedtohaveabroadrange,abroadknowledgeandexpertiseofbankingandhowitallfitstogether.

53. Oneprofessionalbodyreportedthattheyareoftenaskedbybankstoprovidebasicgeneraltraining:

That’ssomethingthatwedoquiteabitof,wedooftengetaskedbybankstogoanddoreallysortofbasic‘thisiswhatabankis’typeoftrainingtocohortsofstaffinbanksthatarenotbankspecialists….Thereisonebankthatwequiteregularlygoinandspeaktonewrecruitsoftheirfinanceteams.They’renotcustomerfacingandthey’reverywelleducatedintermsofaccountingbuttheydon’tnecessarilyknowwhatbanksareandwegoinandspend…alittlebitoftimesaying,‘thisiswhatbanksare,thisishowtheywork,thisiswhatyourroleisinthebankandthisiswhyit’simportant’andallthatsortofstuffandmaybeit’sthatkindofbasicknowledgethatyouwouldexpect.

54. Somebankandbuildingsocietyintervieweesexpressedtheopinionthatageneralqualificationhasthecapacitytoprovide‘agoodgrounding’,whichwouldprovidecontinuityforbankerswhoarelikelytomovearoundalot,whetherwithinorbetweenorganisations(seeSection4.2.4.1belowformoreviewsaboutcontent):

Tohaveanestablishedbaselineofknowledgeofpeoplewhohavebeeninotherorganisationsandknowthatwhenyoutakethemthere’sacommonunderstandingofthebasics,couldbeverypowerfulwhichmeansthereislessofarequirementofyoutorebuildthatcapabilityineveryonewhojoinstheorganisationconsideringtheymightbethereashorttime.

Banking-relatedprofessionalbodyintervieweesalsotendedtothinkthataqualificationcoveringthefundamentalsofbanking,andpromotingageneralunderstandingofthewaytheindustryworks,wouldbeuseful.

53

I’mstaggeredatthenumberofpeoplewhodon’treallyknowwhatbanksdoeventhoughthey’vebeenworkingintheindustryforseveralyears.Thatwouldsuggestthereistheneedforgeneralorgenericqualificationsbutalongside[that]it’sequallyimportantthereisbothspecifictechnicalandemotionaltrainingaswell.Idon’tknowthataforeignexchangetraderonatradingfloorreallyneedstogettoomuchdeptharoundvulnerableconsumersandtreatingcustomerswithempathy,butequallyshouldbeveryclosetowheretheethicalboundariesintheirrolemightlie.

Ifyouworkinabank,youshouldhaveabroadbaseofknowledge,youshouldknowthepurposeandfunctionofabank,youshouldhaveanideaaroundtheroleofcentralbanks,youshouldhaveanideaaroundinterestrates,howtheymayimpactyourcustomers.

Nowadaysbankingisincrediblybroad.Whatusedtohappen…isyoualltendedtocomeinandworkinabranch,dothebankingqualifications,thenifyouwentintoHR,goinHRhavingbeeninabranchorgoandworkinmarketinghavingbeeninabranch.Nowadaysmanycolleagues,howevertheyjointhebank,willjustgostraightintoHR.They’llbeworkingforabankbutmayneverhaveactuallyworkedinabranchorhaveexperienceoffrontlinebanking.Atthemomentwe’relookingatdevelopingsomethingin-houseaboutbankinggenerally.Itisalmostthatchallengeofsomebodywhoworksinanoffice,inabank,butactuallydoesn’tdealwithbankingdaybyday,seeing…whytheyneedaqualificationaboutbanking.

55. Anumberofintervieweesalsosawthatahigh-profilegeneralqualificationcouldhaveavaluableroleinfosteringasenseofprofessionalidentity,andreturningasenseofprideinbanking:

Theyseeitasbeinglike‘Iwanttofeelproudagain’….

56. Weturnnowtoanumberofintervieweeswhoidentifiedreasonstodoubtthevalueofageneralqualification,orreasonsforcaution,evenifoveralltheyendorsedtheidea.

57. Onesourceofdoubtwasthequestionofwhetherbankingisaprofession.Ifnot,itmightbebettertoconcentrateonqualificationsinspecificareasincludingthosethataregenuineprofessions.Thefollowingquotationisfromabanking-relatedprofessionalbody,butnotoneofthecorebankingprofessionalbodies.

Ihavemydoubts.Iwouldn’tsay‘no’,butthepointisthereisn’tabankingprofession.There’sabankingindustry.Idon’tthinkthere’saprofessionthesedays,itissowideandcomplex.Thatcomesbackto‘whatisaprofession?’,andIthinkyouhavetoanswerthatquestion.Therearecertainbadgesofprofessionalism.Oneisthatyouhaveadutyofcaretoyourclient,whichisdifferentfromadutyofcaretoyouremployer.That’smaybethecaseinsomebankingtransactionsbutit’snotthecaseinallbankingtransactions.Withouttheactivesupportoftheemployer,whorecognisesthattension,Ithinktheideaofageneralqualification,professionalasopposedtoacademic,willbeanon-starter.

Bycontrast,twoseniorbankorbuildingsocietyintervieweesrejectedthisview,saying:

Ithinkit’svitalthattheworknomatterwhattheroleisalwaysservingaclient.

…and:

Wherethebankingandbuildingsocietyprofessionlostitswaywasnotthinkingofitselfasaprofession.

54

58. Itwasnotedbybankandbuildingsocietyintervieweesthatthevastmajorityofbankerscurrentlyintheindustry,includingthoseinseniorpositions,donothavesuchageneralbankingqualification.Ifitwasgoingtobecomeanexpectationthateveryoneintheindustryshouldhaveaqualificationinbanking,therewouldbeaquestionastowhattodoabouttheseexistingemployees.Iftheywouldallbeexpectedtotakeaqualification,thenumberstakingthemcouldbehuge,anditmightbeunreasonabletoexpectanexperiencedbankertotakewhatmightbeaquitebasicqualification.Onebankorbuildingsocietyintervieweealsoaskedwhatwouldhappenifanexperiencedbankerfailedthequalification:

….youknow,it’snotexactlyanincentiveforpeoplewho’vebeenabankerfor30yearstohavetositforaqualificationwiththeprospectofbeing[failed].

59. Itwasnotedthatbankingisanincreasinglyinternationalindustryandthattheremightbeanissuewiththeinternationalrecognitionofqualifications.However,somethoughtthatthispotentialissuecouldbeovercome.OnebankingprofessionalbodyintervieweenotedthattheUKisseenasaleaderinthefinancialservicesindustryandthatanexpectationforbankerstotakeageneralqualificationinbankingmightbelikelytospreadtoothercountries.Asimilarviewwasexpressedbyabankorbuildingsocietyintervieweefromalargemulti-nationalfirm.

60. Afurtherdifficultynotedbybankandbuildingsocietyintervieweeswastheissueofdeliveringageneralqualificationtodiversegroups,forexamplethoseenteringabankwithanMBAandthosecominginstraightfromschool.Butothersfeltthatthesepedagogicalissuescouldbeovercome.

61. Onereasonforcautionexpressedbyanumberofintervieweeswasthethoughtthatcreatinganexpectationforbankerstobequalifiedmightlimitthediversityofthesector.Abankorbuildingsocietyintervieweenotedthatdiversifyingitsworkforcewasakeyaimfortheirorganisation,andexpressedconcernthatstandardisingtheentryrequirementsmightnotbeconducivetothis.Thesameintervieweewasconcernedaboutthepotentialeffectonskilledemployees,forexample,aprogrammerwhohadthepotentialtobecome‘thenextSteveJobs’mightbeputofffromworkinginthebankingsectoriftherewereonerousrequirementsintermsofqualifications.

4.2.4.1 Thecontentofageneralqualificationinbanking

62. Ifthereistobeageneralqualificationinbanking,orasetoftieredlevels,thenthequestionofcontentarises.Bankandbuildingsocietyintervieweeswhofavouredsuchaqualification,orsetofqualifications,hadfairlyclearviewsontheoutlineofitscontent:

ButIdothink,basedonmyexperienceintheindustry,that…there’ssomebodyjustunderstandingabasicprofitandlossaccount,andabasicbalancesheetandhowwemakemoneyinthisbusiness,evenataverylowestlevel,Ithinkit’savery,verygoodthing.Itputstheminamuchbetterplacetounderstandwhywemakesomeofthedecisionswemakearoundinterestrates,arounddifferentaspectsof[thebusiness]-whichmakesthembetterabletodealwithconsumers….

….it’saverygoodthingtounderstandhowbankingmarketswork,howcapitalmarketswork,thevarioustypesofexposuretoriskmanagement.

….howyouassessrisk,whatrisksarethere,howyoufund,whetherit’sfromretailorwholesalemarkets,howthosemarketswork.

…someofthekeyelementsofwhatbankingisandbanking’sroleinsociety.

55

…..Especiallythatsocialpurposerole.That’swherealotofbankerslostfocusinthecrisisandwherealotofthediscussionaboutbringinginprofessionalismcame.

63. Summarisingfromtheseandothercomments,intervieweescanbeseenassuggestingthatpossibleelementsofageneralqualificationinbankingshouldinvolveatleastageneralunderstandingof:

o Howthedifferentelementsofbankingfittogether;

o ‘Wherethemoneycomesfrom’,andtheflowofcashfromsaversandtoborrowersorinvestors;

o Risk,fundingandmarkets;

o Thehistoryofbanking;

o Thesocialpurposeofbanking;

o Asetofcoreethicalprinciplesthatunderpinprofessionalbehaviour,includingthedutytoservethepublicinterest;

o Theregulatoryandgovernanceframework.

64. Thustherewasabroadconsensusthatthe‘technical’contentshouldbeatafairlybroadlevelofgeneralityandthatafocusonmattersofethics,regulation,andconductwouldbeaccessibleto,andimportantfor,allbankingemployees.Astwoprofessionalbodyintervieweessaid:

Itcanfocusonsomeareasthatprobablytranscendallpartsofthebankingindustry:ethicsandintegrityandthosesortsofdisciplinesifyoulike,issomethingthatonecouldenvisagebeingrelevanttoeverybody.

Iwoulddescribethatinsomerespectsasaregulationandethicstypequalificationwhichsetsouttheregulatoryframework,helpsindividualsunderstandhowit’sputtogether,whattheirobligationsandresponsibilitiesare.Youcouldtailorthattothebanks’owncodesofconduct.

65. Oneintervieweesuggestedthatthedesignofanygeneralqualification(orframeworkofqualifications)shouldbecarriedoutbyprofessionalbodiesandfirmsworkinginpartnership.

66. Therewassomediscussionhereofthespecificneedsofbuildingsocieties.Whilethereareclearlylargeareasofcommonconcernbetweenbanksandbuildingsocieties,therearealsodifferenceswhichareseenasimportantbybuildingsocietiesthemselves.Therefore,anyqualificationframeworkwouldneedtoreflectthisinordertobeseenasvaluablebythebuildingsocietysector.Thesedifferenceslargelyarisefromthedifferentownershipstructureofbuildingsocieties,andwouldincludeethicalandculturalconcerns:buildingsocietiesseetheirultimateresponsibilityasbeingtotheirmembersratherthantoshareholders,andatleastoneintervieweesuggestedthatthishadanimportanteffectonthecultureanddecision-makingapproachintheirfirms(whilstacknowledgingthatissuessuchastrustwerecommonacrossthebankingandbuildingsocietysector).Ageneralqualificationwouldperhapsneedtohavesomecontentspecifictobuildingsocieties,therefore,butdeliveryisalsoimportant:buildingsocietieswouldbelikelytovaluetrainingdeliveredbypeoplewithexperienceofworkingintheirsector.

56

67. TheBuildingSocietiesAssociationiscarryingoutanextensivegapanalysisofqualificationsandtrainingavailableintheirfield,whichcouldbeofvalueindevelopinggeneralcontentandaframeworkofqualifications.

4.2.5 Pathwaysandframeworks68. Overall,intervieweeswereenthusiasticabouttheideaofcommonpathwaysamong

qualifications,orframeworksofqualifications,andseveralbankandbuildingsocietyintervieweesexpressedadesireformoreguidanceonsuchpathways,whetherfrombanking-relatedprofessionalbodiesorfromacanopybody.Abankorbuildingsocietyintervieweesaid:

TheotherthingIthinkprofessionalbodiesdowellorcancontributeinis‘here’sthestructureofthecareerpath,here’sthetrainingfromadevelopmentperspectiveandalsofromaroleperspectiveandalsoanexperienceperspectivethattypicallyyoumightexpectasyou’regoingthrough.’

Anothersaid:

Ithinktheinstitutesandbodiesshouldbebetteratsignpostingwhatcomesnext.Ithinktheysay,‘you’vegotit,we’reofferingthisnextone,’butthenextonemaynotbetherightone.Itmaybeforadifferentbodyorspecialityandyou’reworkingyourwaythroughalmost,notquiteblindly,butifyou’relookingatsaynineteenbodies,afteryou’vedonethatyou’rebesttoactuallygosomewhereelse.AndIdon’tthinkthere’sthatframework.

Thesepathwaysorframeworkswouldincorporatequalificationscontainingsomegeneralcontentalongsidesomespecialistcontent.Onesuggestionmadebyabankorbuildingsocietyinterviewee,forexample,wasforthreetiersofqualifications:oneverygeneralentrylevelqualificationforallnewstarters,oneforslightlymoreexperiencedbankerswhoarestartingtotakeonmoreresponsibility,andthenathirdforthoseenteringaleadershiprole.

69. OneintervieweefromastakeholderorganisationmadeacomparisonwithCharteredSurveyors:

That’sthepointwiththesurveyor,sotheycanallhavethetitle…of‘charteredsurveyor’,butitthenhasa‘charteredsurveyordashmanagementconsultant’,‘charteredsurveyordashruralproperty’.Soifthey’regoodenoughoriftheywant,theycouldhavetwospecialisms.Butif…you’regoingtothemforadvice,youknowwhichfieldyou’rewithin,withinthatwholeindustrythatthey’retheexpertsfor.

70. Someofthebankingprofessionalbodiesappeartohaveputalotofthoughtintopathwaysamongtheirownqualifications,andtohowqualificationsatdifferentlevelssupportbankersatdifferentstagesoftheircareer.

71. Someintervieweesreportedbeingawareoftheirmembersalsobeingmembersofotherprofessionalbodies.Forexample,aqualificationfromtheACTistypicallyasecondprofessionalqualification,withmostmembersalsobeingmembersofICAEW.However,thereappearsingeneraltohavebeenlittleattentiongiventopossiblepathwaysamongqualificationsofferedbydifferentprofessionalbodies.

72. Paragraphs66and67above,concerningBuildingSocieties,mayalsohavesomerelevancehere.

4.2.6 Areasinwhichqualificationsarelacking73. Inordertogetasenseofwheregapsexistcurrently,weaskedintervieweesinwhatareasthey

perceivedqualificationstobelacking.Thisprecipitatedconversationsabouttwoseparate

57

issues.Firstly,intervieweesidentifiedareasinwhichtherewasalackofavailablequalifications,inotherwords,areasinwhichprofessionalbodies(andotherorganisations)arenotcurrentlyofferingqualifications.Theimplicationhereisthateitherthereisademandforthesemissingqualificationsamongfirms,orthereissomeotherreasonwhysuchqualificationswouldbedesirable(forexample,becausethereisaskillsgapwithinfirms,whetherornottheyrecognisethistobethecase),orboth.Secondly,intervieweesidentifiedareasinwhich,whetherornotprofessionalbodiesareofferingqualifications,thereisalackoftake-upofqualificationsamongthebankingworkforce.

74. Intheformercategory(qualificationsthatarenotbeingoffered),intervieweesnotedthefollowinggaps:

o Communicationskillsandother‘softskills’.Severalintervieweesnotedthisgap.Oneintervieweecommentedthatthecurrentlyavailablequalificationsconcentratedon‘hard’technicalskillsattheexpenseofthingssuchascommunicationskillsandemotionalintelligencewhichareequallyimportant.Itisnotclearwhetherthereisexplicitdemandforqualificationsinthisareaalthoughonestakeholderinterviewerstatedthatthiswasarecognisedneedthatwasbeingunderserved.

o Corporatebanking.

o Creditmanagement.

o Qualificationsaimedspecificallyatbuildingsocietiesandspecificallyaqualificationinleadershipforbuildingsocietystaff.

75. Inthelattercategory(qualificationsthatarelackingintheworkforce),intervieweesnotedthefollowinggaps:

o Investmentbankingandthecapitalcommunitiesmarket–someintervieweesfeltthatqualificationswerenotanexpectationintheseareasandperhapstheyshouldbe.

o Thosewhoworkinbranches,andmayworkpart-time,forexampleincashier-typeroles.Anintervieweenotedthatthisgroupwasunlikelytobequalified,andmaynotbetrainedbytheiremployertoagreatextenteither:

Nowadayspeopleinbranchesdon’ttendtotakequalificationsandthat’spartlyareflection[ofthefact]thatlotsofpeopleinbranchesworkparttime;theydon’tgetsupported.Ithinkthat’ssomethingweshouldchange.Andthenofcourseyouhavelotsofpeoplesupportingcustomersfromcontactcentresandsoon…andthensomebanksareverygoodatsupportingtheseareas,butinotherareasyou’llfindthatbankswillsupportthingslikecustomerservicequalifications-historicallyitwouldhavebeensalesqualifications-butnotbankingqualifications.

o Leadersinorganisations-the‘C-suite’(i.e.CEO,CFO,CIOetc.):

Iwouldsay,ifyoumappedacross…theareasofresponsibilitywhereareasonablepersonwoulddeemthat’swheretheproblemwas,you’dalmostfindacompleteabsenceofpeoplewithprofessionalqualifications.Sotheseniorityofparticularareas,youwouldprobablyfindthoseweremissing.

58

4.3 Professionalbodyactivitiesbeyondtheprovisionofqualifications4.3.1 Overviewofservices76. Generally,alloftheprofessionalbodiestowhomwespokeappearedtobeofferingallofthe

servicesthatonewouldexpectaprofessionalbodytooffer.Therewere,though,considerabledifferencesinhoweachactivitywasapproached,andsomesignificantquestionsastotheefficacyofwhatwasofferedinanumberofcases.

Forexample,allprofessionalbodieshaveacodeofethics,butitwasnotalwaysclearwhethermembersengagedseriouslywiththecode,orwhethertherewereseriousconsequencesforthosewhobreachedthecode.Anotherexamplecouldbeadviceandguidance.Thiswasgenerallyofferedbyprofessionalbodiesbutnotalwaysinaveryformalway,withformalguaranteesofconfidentiality,etc.Inmanycases,useofadviceandguidanceservicesbymembersappearedtobequitelow.

Weaskedsurveyrespondentsfrombanking-relatedprofessionalbodieswhichoftheservicestheyofferaremostimportantincontributingtolevelsofa)competenceandb)ethicalbehaviourintheindustry.Theresultsarepresentedbelow:

59

FIGURE5

FIGURE6

Whiletheseresultsarelargelyunsurprising,oneinterestingpointisthatprofessionalbodyrespondentsappearedtoratetheirprofessionalqualificationsandcontinuingprofessionaldevelopmentasrelativelyonlymoderatelyeffectivewhenitcomestoimprovinglevelsofethicalbehaviour.Thisisinlinewiththeideathatbankingprofessionalbodies,inparticular,seequalificationsasprimarilytheretoimprovetechnicalcompetence.(Notethattheaboveresultsincludethoseprofessionalbodieswhicharenotprimarilyfocusedonthebankingsectoraswellasthosewhichare,andsoitisdifficulttobesureexactlywheretheresultsarecomingfrom.)

6

5

9

9

8

5

Providingprofessionalqualifications

Overseeingcontinuingprofessionaldevelopment

Discipliningthosewhobreachethicalstandards

Providingadviceandguidanceonethicalissues

Providingahelplineforwhistleblowers

Providingacomplaintshandlingfunction

Inyouropinion,whichofthefollowingactivitiescarriedoutbyprofessionalbodiesarethemostimportantincontributingto levelsofethicalbehaviour in

thebankingsector?(PBsurvey)

12

10

5

9

2

2

Providingprofessionalqualifications

Overseeingcontinuingprofessionaldevelopment

Discipliningthosewhobreachstandardsofcompetence

Providingadviceandguidanceontechnicalissues

Providingahelplineforwhistleblowers

Providingacomplaintshandlingfunction

Inyouropinion,whichofthefollowingactivitiescarriedoutbyprofessionalbodiesarethemostimportantincontributingto levelsofcompetence inthe

bankingsector?(PBsurvey)

60

4.3.2 Adviceandguidance77. Adviceandguidancecantaketheformofwrittenguidance,perhapsofferedthroughthe

professionalbody’swebsite,orbespokeadviceofferedthroughahelpline(telephoneoremail).Intervieweesdiscussedbothofthese.

78. Manybankandbuildingsocietyintervieweesthoughtthatprofessionalbodiescouldplayavaluableroleinofferingadviceandguidancebothtoindividualmembersandtofirms:

Anexternalindependentandneutraladvisorycapacity…tohelppeoplecalibratewhattheyareseeing.

Itwouldbeagreatthingforthemtocometouswithseminarssaying‘we’velookedatthelegislationhere;thisisourtakeonit’.

However,somequeriedwhethertheprofessionalbodiesactuallyhadthenecessaryexpertisetodothiseffectively,especiallyonethicalissues,aswasnotedearlier:

WhenIlookedatitIthought‘aretheinstitutesforpeopletotellusaboutethics?Dotheyhaveaparticularexpertiseinethics?’I’mnotsayingthey’rebad.Butifoneday,Iwantedtodoastudyonethics,wherewouldIgoto?Woulditbemyprofessionalinstitute?I’mnotsureitwouldbe.

Overalltherewasasensethatbanksandbuildingsocietiesdonotthinkofprofessionalbodiesasoneoftheirfirstportsofcallforadviceandguidance.

79. Somebanking-relatedprofessionalbodyintervieweesacknowledgedthatthisisanareainwhichprofessionalbodiescouldbemoreeffectivethantheyarecurrently.Therewasgeneralagreementontheimportanceofadviceandguidanceandsomefeelingthatthiswasperhapsmissingfromtheofferofprofessionalbodies.

Ithinkthat’saverygoodpoint...Ithinkyou’requiterighttocallthatout.I’mtryingtothinkofthelasttimeIwentoneithertheCharteredBankersortheifswebsites,andIwouldwageritwasprobablytopaythesubsortofindoutaparticularpieceofinformationthatIalreadyknewwasthere.Iwouldn’tnecessarilyseeitasafrontofmindareatogoifIwantedtofindoutaboutsomething.

Membersarehavingdifficultybecausetheirlinemanagersareputtingthemintoaverydifficultsituation.Thatthereissomebodytheycanturntowithintheirprofessionalbodyforadviceandsupport….ThingslikethatIthinkarereallyimportant.Idon’tbelievethatthebankingindustryreallyoffersthat,tothatextent,yet.ButIthinkwedoneedto.

80. Onesuggestedreasonforarelativepaucityofadviceandguidancewasthevarietyofbankingwork;oneintervieweesuggestedthatitwouldbedifficultforbankingprofessionalbodiestoprovideeffectiveadviceforpeopleoccupyingaverywidevarietyofroles.Yetitshouldbenotedthattheadviceprovidedbyprofessionalbodiesine.g.lawormedicinehastocoverasimilarvarietyofareas.

81. Onebankorbuildingsocietyintervieweenotedthataveryhelpfulrolethatprofessionalbodiescouldplaywouldbetointerpretandadvisebanksontheimplementationofregulations,afunctionwhichiscurrentlyperformedbyconsultants.

61

4.3.3 Continuingprofessionaldevelopment(CPD)82. SomekindofoversightofCPD,aswellasprovisionofCPD,wasuniversalamongthebodieswe

spoketo.However,theamount(ifany)ofrequiredCPDandthewayoversightisapproachediscurrentlyquitevaried.Table1givesanoverviewoftheCPDrequirementsofdifferentprofessionalbodies.Morethananyotherprofessionalbodyservices,CPDoversightandprovisionseemstobeundergoingconsiderablechange,withprofessionalbodiesperhapsseeingitasafirststepinmovingbeyondhavingthestatusofbeingessentiallyaqualificationprovider.OneidentifiabletrendisforprofessionalbodiestomovetowardsamodelofmandatoryCPD.One(butnottheonly)driverinthishasbeentheRetailDistributionReview,whichmandatesCPDforfinancialadvisers.

83. ManybankandbuildingsocietyintervieweesthoughtthatprofessionalbodiesbothcouldandshouldhaveastrongemphasisonCPD:

FormetheCPDisreallyimportantandIthinktogetaqualificationwithoutit,I’mnotconvincedthereisalotofpointingettingthatqualification.It’sfineforthree,four,fiveyearsbutthenitbecomesapieceofpaper,justnolongerrepresentswhatyoureallyare.

84. Ontheotherhand,bankandbuildingsocietyintervieweeswerealsowaryofCPDsimplybeingofpoorqualityor‘aracket’:

TheCPDstuffthatcomesonofferisoftenquitemediocre.

OthersnotedthatitisimportanttoensurethatCPDiscosteffective,particularlyforsmallerorganisations.

85. ThestakeholderintervieweestendedtoagreeontheimportanceofCPDinkeepingprofessionalknowledgeandskillsuptodate.Therewasalsogeneralagreement(withoneexception,fromarespondentwhoseCPDisnotmandatory)thatsuchCPDshouldbemandatory.

Howcanbanksever…beprofessionalbyjusttickingaboxandthey’vegotaqualificationorgonethroughatrainingcourseunlessyouhavetoupdateyourknowledgeeveryyearjusttokeepyouuptodate.Ithinkthatforme,wouldbetheonethingIwouldlikethebankingsectortodo.

Certainlysomeonewhowasqualifiedordidsometrainingcoursefiveyearsago,thingshavedefinitelychangedinthelastfiveyearsquitesignificantly.Andyet…you’renotnecessarilytrainedorawareofwhat’shappeninginthelastfiveyears.It’sabiggap.

86. Theaccreditationofin-housetrainingprovidedbybanksandbuildingsocietiesseemstobeaverypopularapproach.Asonebankorbuildingsocietyintervieweenoted:

SoIseeavalueinhavingprofessionalaccreditationbecauseitdemonstratestothepublicandthegovernmentandtheregulatorthatwearedoingalltherightthings,yes.

Severalprofessionalbodyintervieweessaidtheyweredoingthisalreadyortryingtodoit.Onthepositiveside,thisisonewayofaddressingthechallengesarisingfromthesizeofprofessionalbodies(seeparagraph118below),sincethebodiesdonotneedtofindtheirowntrainerstoprovidesuchtraining.Butthereisclearlyaneedtoensurethataccreditedtrainingisofasufficientlyhighstandard.Thereisapossibleconflictofinteresthereforprofessionalbodiesbecauseaccreditationoftrainingisasignificantpotentialsourceofincome.

62

87. AnothermeansofovercomingthecapacityissuethatwasmentionedbyanumberofprofessionalbodyintervieweesisdeliveryofCPDonline,orusingwebinarsetc.Thisalsohastheadvantageofflexibility.Severalprofessionalbodiesnotedinresponsetoaquestionaboutchangestoservicesthattheyaremovingtrainingprovisiononline.Severalintervieweesacknowledged,though,thatonlinelearningbringschallenges,includingariskthattheimpactofpurelyautomatedlearningcanbequitelowanddifficulttomeasure.

4.3.4 Overseeingethicalstandards4.3.4.1 Discipline

88. Whileallprofessionalbodiesworkinginthesectorhavesomekindofdisciplinaryrole,theseappeartobeveryvaried,intermsof:

o Thenumberofdisciplinarycasesarising;

o Theabilityofprofessionalbodiestoidentify,investigateandresolvecases;

o Thepenaltiesavailabletoprofessionalbodies;

o Theultimateconsequencesformemberswhoareexcludedfromprofessionalbodies.

Perhapsmorethananyotherareaoftheirwork,disciplineappearstobetheareainwhichbankingprofessionalbodieshavetheleastclearideaofwhattheirroleshouldbe.

89. Amongbankandbuildingsocietyinterviewees,itwasoftenseenasimportantthatprofessionalbodiesprovidesomekindofdisciplinaryprocedure,becausethisgivescredibilitytothequalificationsthatthebodyoffers.Butitwasnotedthatthedisciplinaryprocessesmustberobust,andthatthereneedstobecoordinationwithregulation.Somebankandbuildingsocietyrespondentsalsofeltthatsuchdisciplinaryprocessescouldbehelpfultofirmstryingtoensurethat‘rottenapples’donotsimplymovefromoneorganisationtoanother.

90. Intervieweeswhofeltprofessionalbodiescouldplayastrongerroleindisciplinepointedtoexamplesfromotherprofessions:

Itmightalsoincludeasortofdisciplinewhereinordertoworkwithininstitutions,onehastohaveamembershipofabodylikethat.Thatiftheytransgressordon’tcomplywiththosebehaviouralorethicalcodes,[then]thatputstheiremploymentatrisk.Whichisnotuncommonwithourprofessionalbodies,certainlyinmycaseasanaccountant,ifIdidn’tmeetcertainethicalandbehaviouralstandardsthenIwouldstandtheriskoflosingmyqualificationwhichinturncouldjeopardisemyemployment.

91. Therelationshipwithregulatorswasalsoseenbyintervieweesasakeyissueandonethathasabearingonthequestionofeffectivediscipline.

Intheory[somekindofdisciplinaryprocedurewouldbehelpful].Theproblemishowthatwouldinteractwiththeoveralldisciplinaryprocessthatweget…undertheseniormanagerregimecertification.

Banksandbuildingsocietiesalreadyfeelthemselvessubjecttocomplexregulation,somanytaketheviewthataddingafurtherlayerofregulationmightonlyconfusematters.Asoneofthestakeholderintervieweesnoted,everymemberofstaffintheindustrywouldbecoveredbytheFCAConductRules,soanadditionalcodeofconductandadditionalenforcementmechanisms

63

wouldbeunnecessaryandlikelytomuddythewaters.Abankorbuildingsocietyintervieweesaid:

Whatyoudon’twanttodowithyourprofessionalbodyinbankingandfinancialservicesistoreplicatetheroleoftheregulatorbecauseit’satoughjobtryingtoworkinthatframeworkandourconstant[request]is,‘keepitsimple.’

However,anintervieweefromtheregulatorysidedidthinkthattheprofessionalbodieshaveausefulroletoplayhere:

PersonallyIthinktheyshould[playarole].Isaythatbecausetheset-upoftheregulatoryframework,we’vegotrulesandguidancebutthatcanonlygosofar.We’vegotanapproachtosupervisionwhichreflectsourprioritiesandresourcesbutit’sanincrediblylargeandcomplexindustry.Ultimatelytheethicalbehaviourorculturethat’sdisplayed,regulatorsaren’tstandingthereallthetimetoobservesotherehastobesomemechanismthatallowsthattoexist,whichisgoodforeveryoneincludingthefirms,theindividualsandtheregulators.Ithinkprofessionalbodies…dohavethatroletoplay.

92. Professionalbodyintervieweeswerealsounsureoftheirlegalfootingwhenitcametodiscipliningmembers.Twointervieweessuggestedapossiblelegalissuearoundhumanrights:thataprofessionalbodycannotremovesomeone’srighttoworkbyexcludingthem.Someprofessionalbodyintervieweeswerewaryofopeningthemselvesuptoexternaljudicialreviewbyinstitutingdisciplinaryprocedurestoostrongly.

Althoughwe’vegotamuchmorerigoroussysteminplacenowandyouknow,you’reverywelcometohavealookatallthepoliciesandproceduresandthingsthatwehaveandhowwedealwithcases,it’sstilltheoneareawhereyouknow,comparedtootherprofessions,becauseofthelackofstatutoryfooting,youknow,ourpowersareincrediblylimited.

93. Thereisalsotheissueofhowprofessionalbodiesbeingresponsiblefordisciplinewouldbeperceivedbypoliticiansandthepublic.Asoneprofessionalbodyintervieweenoted:

Idon’tthinkself-regulationwouldflyinabank-basedsetting,that’snotsomethingthatIthinkthepublicorparliamentarianswouldsupportinamonthofSundays.

94. Oneprofessionalbodyrespondenttotheonlinesurveymadethefollowingcommentaboutthecurrentsituation:

Wearecurrentlyarguingfortheintroductionofaregulatoryrequirement,oravoluntaryagreement(perhapsbrokeredbytheBankingStandardsBoard)forbankstoreportmisconductbyindividualstorelevantprofessionalbodies.Currently,thereisnomechanisminplace(exceptinlimitedcircumstances,e.g.forretailfinancialadviserscoveredbytheAccreditedBodies’Regime)forsuchreporting,whichresultsinasituationwherethecurrentemployer,aprospectivefutureemployerandtheregulatormaybeawareofmisconduct,butanindividual’sprofessionalbodyisnot.

95. However,bankandbuildingsocietyintervieweesweregenerallyambivalentaboutwhethertheywouldwelcomeprofessionalbodiestakingastrongerroleinoverseeingethicalstandards.Severalintervieweesthoughttheycoulddomoregenerallyonethicsandculture.However,someintervieweeswhofelttheirorganisationshadaverystrongcultureoftheirownwerealittlemorescepticalaboutthis.Onestatedthat:

64

IgetmyvaluesandmyculturalviewbecauseIworkfor[nameoffirm]andIexpectHR,Comms,andtheotherpartsoftheorganisationtogivemeasenseofwhatitmeanstobeanemployeeof[thefirm].Iwouldn’texpectaprofessionalbodytogivemethat.

96. Therewasalsogenerallylittleappetiteamongprofessionalbodiesforprofessionalbodiestoplayagreaterroleindiscipline,withthemostcommonlycitedreasonbeingworriesaboutduplicatingtheroleoftheregulatorandcausingconfusion,notedabove.

97. Thefollowingstoryisinterestinginrelationtothewholeissueoftherelationshipbetweenbanksandprofessionalbodiesgenerally,aswellasdisciplinespecifically.Itshouldbenoted,however,thatthestorycomesfrom2007anditispossible(thoughnotcertain)thatthesamethingwouldnothappenin2016:

IrememberthefirstdisciplinarycaseIwasinvolvedinwhenIjoined[nameofprofessionalbody]in2007….Therewassomeoneintheirmid-twenties,whoalreadyhadaroleofsomeresponsibilityinabank,[who]blatantlycheatedinhisexam…Itwasallcaughtoncamera,andtheevidencewasincontrovertible.Hethentriedtobribetheinvigilator…whichwascaughtontapeso,unsurprisingly,hewasexpelledfromthe[PB].Andthenextdaywegotacallfromtheemployersaying,‘pleasecanyouconsideragain,andohbythewayifyouaregoingtobedoingthiswereallydon’twantanypublicity’.Youknow,almostsortofthreateningus:‘Andifyoudopublicisethiswewon’tgiveyouanymorestudents.’Becausetheydidn’twantthebadpublicitythemselves.Imean,I’mafraid,that’saveryshort-sightedreactionanditactuallyappalledmewhenIheardthembasicallysaying,‘Look,isitreallysuchaproblem?Youknow,heonlycheatedonhisexam.’Well,I’msorry,thischapislookingafterpeople’smoney.

4.3.4.2 Reporting,raisingconcernsandwhistleblowing

98. Anotherwayinwhichaprofessionalbodycancontributetoupholdingethicalstandardsisthroughitsmembersreportingonunethicalbehaviour.Someprofessionalbodies,includingtheICAEWandtheInstituteandFacultyofActuaries(IFoA),includeintheircodesofethicsadutytoreporton,orraiseconcernsabout,suspectedwrongdoing.Hence,amemberwhoseessomethingunethicalandfailstoreportistherebyinbreachofthecode.Noneofthebankingprofessionalbodiescurrentlyhaveaspecificdutyofthiskindintheircodes–institutingonewouldbeafirmsteptowardsrobustandeffectivediscipline.

99. Ingeneral,theideathatprofessionalbodiesmightprovidesupportforwhistleblowersfoundsomesupportamongbankandbuildingsocietyinterviewees.Whenaskedaboutthis,thebankingprofessionalbodiestendedtorespondthattheywouldtrytohelpawhistleblowerifonecameforward,butnoneofthemadvertisethemselvesasapotentialportofcallforwhistleblowers.Again,thereisanissueofoverlapwiththeregulatorhere,astheFCAalreadyhasanactiveprogrammeofencouragingandsupportingwhistleblowers.However,theremaybeaspecificroleforprofessionalbodiestohelpmemberswhohaveaconcernbutareunsureofwhetheritwarrantsareporttotheregulator.Thiscouldtaketheformofadviceandguidanceinthefirstinstance,andperhapscommunicatingwiththeregulatoronbehalfoftheindividualintheeventthatareportdoesneedtobemade.Asonebankorbuildingsocietyintervieweeputit:

….it’salmostlikehavingacoachoracounsellor[rewhistleblowing].SoIseenothingwrongwiththatwhatsoever.Idon’tthinkitletsorganisationsoffthehookfromhavingtheirown

65

whistleblowingpolicyorapolicythatprotectspeoplewhenthereis[reason]fortheirconcerns.

4.3.4.3 CodesofEthics

100. Allprofessionalbodieshaveacodeofethics,butakeyissueistheextenttowhichtheyareknownandunderstoodbymembershipsoastoeffectivelyinfluencegoodjudgement.

101. Oneintervieweesuggestedthat,throughtheiremployers,70%oftheUKbankingworkforceiscoveredbytheCharteredBanker:ProfessionalStandardsBoard(CB:PSB)codeofconduct.AsofApril2016,thisisnowidenticaltotheCharteredBankerInstituteCodeofConduct,anditisalsocloselymappedtotheFCAConductRules.Itshouldbenotedthatreachisnotthesameasengagement,anditwouldbeinterestingtoknowhowmanyoftheindividualscoveredbytheCB:PSBcodeareawareofthecodeanditscontents,andwhattheymean.TherearealsosomenotablegapsintheFCAConductRules–forexample,theymakenoreferencetothepublicinterest,andthedifficultconceptofintegrityislefttobedigestedandunderstoodbyindividualswithoutanyaccompanyingguidance.

4.3.4.4 Summary

102. Overall,theredoesappeartobesomeappetiteforprofessionalbodiestoplayamorerobustroleindiscipliningmembers.However,thereissomescepticismaboutthisinfirms,andthereareanumberofsignificantworrieswhichwouldneedtobeaddressedbeforethiscouldhappeneffectively.Specifically,professionalbodieswouldneedtohaveinplace:

o Clearlydefinedboundariesbetweentheirremitandjurisdictionandthoseoftheregulator;

o Appropriatechannelsofcommunicationbetweentheregulator,firms,andprofessionalbodies;

o Thesupportofbanksandbuildingsocieties,workinginpartnershipwithprofessionalbodiestoinvestigatecasesandtopassonrelevantinformation;

o Clearconsequencesforthosewhoarefoundguiltyofprofessionalmisconduct;

o Clearchannelsforindividualmemberstoreport,orraiseconcerns,andacultureofresponsiblereportingamongsuchprofessionals,perhapsreinforcedbyadutytoreportenshrinedinthecodeofethics.

4.3.5 Thoughtleadershipandnetwork-building103. Manybanksandbuildingsocietiesthoughtprofessionalbodiescouldplayausefulrolein

thoughtleadership.TheynotedthatthebanksandbuildingsocietiessectorhadtheBBAasatradebody,but,‘they’reclearlyalobbyinggroup’.Theintervieweewantedabody‘thatspeakswithaclearsenseofprofessionalism’.

104. Onemajorchallengetothisroleisthediversityofthesector.Withsomanyprofessionalbodiesoperatinginthesector,andthediversityofbankingwork,itisnotclearthatanyoneorganisationcanhopetospeakonbehalfofthesector.However,theremaybearoleforanumbrellabodytobringtogetherinterestedparties(includingtheprofessionalbodies)andtosummariseandclarifythelatestthinkingonparticulartopics.

105. Networkingandcommunitybuildingwassomethingthatwastouchedonbyseveralinterviewees.Onebankorbuildingsocietyintervieweecommented:

66

Ithinkthatcommunitycanonlybehelpful,andsharingbestpractices,thatcanonlybe[conducive]toabetterculture.

Membersappeartoconsiderthatnetworkingeventswouldbeusefulasawayofbuildingacommunityandsharingbestpractice.Oneprofessionalbodyintervieweeinparticularwasenthusiasticaboutthisasawayofaddressingissuesofsiloworkingandbankersnotunderstandinghowtheirrolesfitintotheoverallworkofbanks.

There’saroleforprofessionalbodiesin…helpingpeoplefromdistantorganisationstocometogetherandsharebestpractice.AndoneexampleIwastalkingtooneofourseniormembersaboutrecently,whenhewasagraduatetraineewithaverylargebank,theyhadveryregular,atleasttwoorthreetimesayearallofthegraduatetraineesonthatparticularcohortwouldgettogetherforagraduatetraineeweekend….Hesaidhowusefulhefoundthatasayoungentrantintothebankingsector,becausetherewasacommunityofpeoplewhoweregoingthroughsimilarkindsofexperiencestohimbutpotentiallyindifferentsectorsofthebank….Hethoughtitwasareallygoodwayforhimtounderstandwhatotherpartsofthebankweredoingandhefeltlikethatwasareallyprogressivethinganditwas[something]thatdidn’treallyhappennowthatgraduatetraineescameintoorganisationsandwereimmediatelytold‘you’reinrisk,you’reinsuppliers,you’regoingintocommercialbanking’andtheywerestreamedoffandthatcommunityaspecthadbeenlost.

4.4 Theeffectivenessofprofessionalbodies4.4.1 Effectivenessindeliveringcompetenceand/orethicalbehaviour106. Figures7to10showtheperceivedeffectivenessofbothprofessionalqualificationsandCPD

incontributingtocompetenceandethicalbehaviour,accordingtobanksandbuildingsocieties,andprofessionalbodies:

FIGURE7

0

0

7

6

1

0

4

7

3

1

1Notatallimportant

2

3

4

5Veryimportant

HowimportantdoyouthinkprofessionalqualificationsorCPDareincontributingtolevelsofcompetenceinyour

organisation?(Firmsurvey)

CPD Professionalqualifications

67

FIGURE8

FIGURE9

4

0

4

4

17

5

0

2

4

17

1Notatallimportant

2

3

4

5Veryimportant

HowimportantdoyouthinkprofessionalqualificationsorCPDareincontributingtolevelsofcompetence?(PBsurvey)


2

6

9

2

1

2

6

9

2

1

1Notatallimportant

2

3

4

5Veryimportant

HowimportantdoyouthinkprofessionalqualificationsorCPDareincontributingtolevelsofethicalbehaviourinyour

organisation(FirmSurvey)?


68

FIGURE10

107. Wealsoaskedwhatwouldhappentolevelsofcompetenceandethicalbehaviourinthe

sectorifbankingprofessionalbodiesdidnotexist.

FIGURE11

4

2

10

3

10

5

1

7

3

13

1Notatallimportant

2

3

4

5Veryimportant

HowimportantdoyouthinkprofessionalqualificationsorCPDareincontributingtolevelsofethicalbehaviour?

(PBsurvey)


1

0

7

3

3

8

Competence

Ethics

Ifbankingprofessionalbodiesdidnotexist,levelsofcompetenceandethicalbehaviourinthebankingsector

wouldbe...(Firmsurvey)

Alotlower Somewhatlower Aboutthesame Somewhathigher Alothigher

69

FIGURE12

108. Takenasawhole,thechartsabovesuggestthatprofessionalbodiesaregenerallyperceived

tobemoreeffectiveincontributingtolevelsofcompetencethanofethicalbehaviour.However,theyalsosuggestamismatchbetweentheperceptionsofbanksandbuildingsocietiesandthoseofprofessionalbodiesthemselves,withprofessionalbodiesratingthemselvesmorehighlythantheyareratedbybanksandbuildingsocieties.

109. Intheinterviews,banksandbuildingsocietieswereingeneral(butnotuniversal)agreementthatprofessionalbodieswereeffectiveinrespectofenhancingtechnicalskillsandcompetence.However,somenotedthataprofessionalbodyisnottheonlyorganisationthatcanprovidesuchskillsandcompetences,andemployeescouldacquirethisexpertiseinotherways.Professionalbodieswereseenasoneprovideroftrainingamongmany.Asoneintervieweesaid:

….weusethemforthosequalificationswehavetousethemforlike[PQ].Thenforourotherpeoplewe’retendingtoputthemthroughmorepracticalbaseddevelopmentlikeNVQs.

110. Ingeneral,professionalbodiesweremoreconfidentabouttheireffectivenessinraisinglevelsofcompetencethanofethicalbehaviour.

Ithinkprofessionalbodiesareverygoodatdeliveringtechnicalcompetence….Wedothatbygoingoutanddeliveringtothebanksandtothefinancialservicesindustryandsaying‘whatdoyourpeopleneedtoknowtoperformeffectivelyinthisrole?’andthenweworkveryhardtodevelopprogrammesoflearning,bethatqualificationoraCPDprogrammeorapieceoftrainingandhelpmeetthatskillsgapandthefeedbackwegetfromthoseprogrammesisverygood.Andwe’vegotsomeverystrongevidencetosuggestthatpeoplewhohavebeenthroughourprogrammesusetheknowledgethattheyacquireintheirday-to-dayroles,thattheyfeelit’shadapositiveimpactontheirlevelsofcompetenceandontheircareerprogressionandallthosesortsofthingssoIthinkprofessionalbodiesdoareallygoodjobatthat.

111. Thestakeholderintervieweeshadsomewhatmixedviewsabouttheprofessionalbodies’effectivenessinrespectofcompetence.Onesaidthat:

Ithinkthattheyareabsolutelyvital,Ithinkthattheyarestillinthesomewhatoverlookedcategory.

7

6

15

15

6

8

1

1

0% 20% 40% 60% 80% 100%

Competence

Ethics

Ifbankingprofessionalbodiesdidnotexist,levelsofcompetenceandethicalbehaviourinthebankingsector

wouldbe...(PBsurvey)

Alotlower Somewhatlower Aboutthesame Somewhathigher Alothigher

70

Ontheotherhand,anothersuggestedthat:

Theyshouldbedoingmoreaboutdevelopingarobust,highcalibre,qualityqualificationandmoveawayfromveryspecialist,ad-hoc,low-leveldumbeddowncertification.

Thissupportstheideaofalackofagoldstandardqualificationinbanking(seeissue2inthecentralfindings).Asanotherstakeholderintervieweenoted:

Ifthereisnoframeworkfromhowthoseprofessionalqualificationsareacquiredwithinabroader,biggerpictureandthereisn’tacommonthreadorphilosophybetweenalltheveryspecialistqualifications,that’sexactlywhereyouloseit.Soatthemomenttheprofessions,theydoareasonablejobonthecompetenceside,butbecausetheprofessionalqualificationsarerightnow,they’renotdoingsowellonthecultureside.

112. Onethicalbehaviour,somebankandbuildingsocietyintervieweesthoughtprofessionalbodiescouldcontribute:

Ithinkthereissomethingaboutbringingpridebacktobanking…[andaswellasinternalworkonvalues]…ifyoucanthenrubberstampitontop,Ithinkthatwouldhelp.

Anothersaid,‘theycan[contribute],especiallythatsocialpurposerole.”

Athirdbankorbuildingsocietyintervieweecommented:

Ithinktheycouldandshould[contributemore].Ican’trememberwherethishasbeendiscussedbutanideaofabankandbuildingsocietiesversionoftheHippocraticOathwouldbeaverygoodone….Thereneedstobeacodeofethicsthatpeoplecancitethat[they]shouldandcansignupto.‘ThisisthewayIwillbehaveinmyjob’.Professionalbodieswouldbebestplacedtodeliverthat.

Anumbercommentedthatindividualsspeakingupaboutethicalissuesisanareainwhichprofessionalbodiescanbeeffective,byprovidingsupporttothosewhospeakout.

However,asnotedabove,somebankandbuildingsocietyintervieweesweremoresceptical:

IgetmyvaluesandmyculturalviewbecauseIworkfor[nameoffirm]andIexpectHR,Comms,andtheotherpartsoftheorganisationtogivemeasenseofwhatitmeanstobeanemployeeof[thefirm].Iwouldn’texpectaprofessionalbodytogivemethat.

Idon’tknowenoughdetailtocommenton[theethicalcontent]butmygutreactionisno,they’renot[strongenoughonthat].

…..intermsofethicsandculture,profqualscanhaveaparttoplaybutthey’recertainlynottheanswers.

113. Onewayinwhichbanksandbuildingsocietiesthoughtprofessionalbodieshadthepotentialtobeeffectiveinimprovingethicalconductisbyprovidinga‘secondlens’.Asoneputit:

Ithinkso,becausepeopleoughttobegettingmessagesfromelsewherethatarereinforcingthegoodside[ofthefirm’sculture].If[thecultureis]notnecessarilyworkingaswellinternally[asitshould]itwouldhelpreinforcethat.Alsothisgeneralthingthat…peoplebeingexposedtodifferentwaysofthinkingisalwaysuseful.

Bankersworkinhighlycommerciallypressuredenvironments,andthereispotentiallyaroleforprofessionalbodiesinprovidinganotherwayofseeingissues,withaseparatesetofbackgroundassumptions,valuesandpriorities.Ethicalissuessuchasthebestinterestsofcustomers,forexample,orthepublicinterest,maybemoresalienttoprofessionalswhohaveundergonea

71

robustprocessofprofessionalformation,whohaveongoingCPDrequirements,andwhohavethecontinuingsupportandoversightofaneffectiveprofessionalbody.

Asoneintervieweeobserved,‘thereisaremarkablebenefitintherebeinganexternalobservationofcultureandethics’.

However,tobeeffectiveinthiswayprofessionalbodieswouldneedtotakearobustapproachtodealingwithproblems:‘thebigcrunchcomesformenotinwhenitgoeswell,butwhenitdoesn’tgowellandwhatdoesthisbodydowhentheyencountersomebodytheybelievetobeunethical?’

Someintervieweesalsofeltthatalotofprofessionalbodieshavenotputmuchemphasisonethicsintheirtraining,andthereforeitcannotcurrentlybeassumedthatmembersofprofessionalbodieswillbeequippedwitha‘secondlens’inthisway.

114. Theideathatprofessionalbodiesdonotputenoughemphasisonethicsintheirqualificationswasalsosupportedbyoneintervieweeinaprofessionalbody(althoughitshouldbenotedthatnotallprofessionalbodyintervieweesthoughtthis):

No,Ithinkwecoulddoalotmoreanddoalotbetter.So,forexample,ifwelookatthe…ICAEW,ontheirwebsite,ontheirwholeprofessionalqualificationprogramme,it’scleartoseetomethat[ethics]issomethingthatisveryimportanttothem,andthat…theyembedthatinallthattheydo.AndIthink…thebankingindustrycouldlearnalotfromthat.SoIthinkalthough…inpartwetalkaboutthisandwe’vestartedto…trytodosomethingaboutit,atthemomentwe’restill…comingfromalongwaybehind.

115. Ingeneral,therewasaconsensusamongintervieweesfromallgroupsthatbankingprofessionalbodiesarenotaseffectiveastheycouldbeinraisinglevelsofethicalbehaviour.

116. Professionalbodyintervieweesidentifiedseveralfactorswhichmightlimittheireffectivenessatraisinglevelsofethicalbehaviour:

o Thelackofa‘licensetooperate’,i.e.mandatorymembershipforthoseworkinginthesector;

o Banksandbuildingsocietiesnotseeingprofessionalbodiesprimarilyasprovidersofethics;

o Thepresenceofanentrenchedcultureinbankswhichisdifficultforprofessionalbodiestoshift.

117. Whilesomestakeholderintervieweesthoughtthatprofessionalbodiescouldbedoingmore,mostagreedthattheywerehamperedbya)thefactthatqualificationsandmembershiparenotaregulatoryrequirementandb)alackofengagementandcommitmentfrombanks.

Whenitcomestoethicsanddiscipline,Ithinktheyallwrestlewiththefactthattheyarevoluntarybodiestoanextent.Andhowdoyouhookorobligepeopletobecomemembersandthensanctionanddisciplinethemsothatitdoeshaverealmeaningintermsofthatindividual’sfuturelife?

118. Thesizeofthelargerbanksrelativetothesizeofprofessionalbodiesappearstobeabarriertoeffectivenessinrespectofbothcompetenceandethicalbehaviour,inparticularbecause:

72

o Thescaleoftrainingrequirementscanbebeyondtheprofessionalbody’scapacitytodeliver.

o Theexpensetobanksandbuildingsocietiesofsupportinglargenumbersofemployeestostudyforqualificationscanpreventthemfromcommitting,particularlywhenexternallyrecognisedqualificationsincreasethelikelihoodthatemployeeswillseekworkelsewhere.

o Therelativesizeoftheorganisationscreatesanunevenpowerdynamicbetweenthem(seeissue4inthecentralfindings).Particularlyincaseswhereaprofessionalbody’strainingincomeispredominantlyderivedfromoneortwolargebanks,thesebanksaretheninapositionwheretheycanputpressureonprofessionalbodiestochangetheirtrainingoffertosuittheirneeds.Thisisnotalwaysaproblembutthereisaworrythatstandardscanslip.

119. Bankandbuildingsocietyintervieweesfeltprofessionalbodiesshouldlookmoretothefutureandbecomebetteratpredictingdevelopmentsinthesector.Somehadasensethatprofessionalbodiesarebehindthetimes.Again,therewassomefeelingthatthismightbemoreeffectivelyachievedbyalargeprofessionalbodythan,asiscurrentlythecase,anumberofsmallprofessionalbodies.

4.4.2 Effectivenessincontributingpositivelytoorganisationalculture120. Wewerealsointerestedintheeffectivenessofprofessionalbodiesincontributing,notjust

toethicalbehaviouronanindividuallevel,butalsotoorganisationalcultureingeneral.Inthesurvey,responsesofbanksandbuildingsocietiessuggestedonlyapartialendorsementofprofessionalbodies’effectivenesshere.

FIGURE13

121. Respondentswereaskedtoexplaintheiranswer.Someoftheresponseswererevealing:

o ‘Variedbackgroundsandcompetenciescontributehighlytodiversityofthought.’

o ‘NotsureIagreethatethicsandqualificationsaretheissue.Tonefromthetopandcultureare.’

1 3 7 0

0% 20% 40% 60% 80% 100%

1

Doyouthinkhavingsomeemployeeswhoaremembersofbankingprofessionalbodiescontributespositivelytothe

ethicalcultureofyourorganisation?(Firmsurvey)

No- notatall No- notmuch Yes- alittle Yes- alot

73

o ‘Notseenasrelevantatthemoment.Theprofessionalbodiesseemtohavebecomeamethodofgeneratingmoneythroughexams.’

o ‘Professionalbodiesaremorefocusedontechnicalskillsthanethicsandculture.’

o ‘Colleaguestendtocarryoutprofessionalqualificationsforregulatoryortechnicalreasons.Thefocusonethicsvariesbyqualification.Overall,thedaytodaycultureandrewardsystemwithinwhichacolleagueoperateshasafargreaterimpactontheirbehaviourthanacourseofstudy.BeyondthatIwouldsuggestthatbeingamemberofabankingprofessionalbodyhasminimal,ifany,impact.’

122. Intervieweesinbanksandbuildingsocietiesdidthinkprofessionalbodiesplayedarole,but(inlinewithsomeofthesurveycommentsabove)notedthatorganisationalculturealsohasaverysignificanteffectonlevelsofethicalbehaviour.Astwobankorbuildingsocietyintervieweessaid:

ButIthinkbyfarthemorepowerfuliswithintheorganisationitself.It’salmostlikethebiggestinfluenceonchildrenisfamily,that’swhereyouspendmostofyourtime.

Theethicalside,notconvincedby.Itverymuchdependsonthequalificationyoudo.Onwhat’scovered.Ihaveaviewthatbyfarthebiggestimpactonethicalbehaviourofindividualsistheenvironmenttheyworkin.

Insomecases,theyhighlightedtheeffortsoftheirownfirminthatregard,ratherthanthatofprofessionalbodies,asnotedabove.

123. Itisimportanttounderstandthelimitationsofprofessionalbodiesinaffectingbehaviourthroughorganisationalculture.Membershipofaprofessionalbodywillnotstopawickedindividual,norwillafewindividualswhoaremembersofaprofessionalbodybeabletoturnaroundanorganisationwhichhasanentrenchednegativeculture.However,thereispotential,asnotedabove,forprofessionalbodiestoprovideanalternativelensthroughwhichindividualscanviewtheactivitiesoftheirorganisation.Culturecanbethoughtofas‘thewaythingsaredonearoundhere’;individualswhoaremembersofaprofessionalbodyareabletothinknotonlyintermsofthewaythingsaredonewithintheiremployingorganisation,butalsothewaythingsaredoneintheirprofessionalbody.Iftheprofessionalbodyiseffectiveinarticulatingitsvalues,itcanencourageindividualstodefendthesevaluesincaseswheretheyareinconflictwiththeorganisation.Oneortwoprofessionalsaloneareunlikelytobeabletochangemuch,butifthereisa‘criticalmass’ofprofessionalsthinkinginthisway,achangeinculturemightbeachieved.Aprofessionalbody,then,isnotasilverbulletbutaddsweightbyhighlightingethicalrequirements.Italsohelpspeopletofeeltheyarepartofawidercommunity,whichcansupportthemintheirethicalreflection,andcanprovidechecksandbalancesonanorganisationalculture.

124. Someintervieweecomments(banksandbuildingsocieties)hereechoedtheconcernnotedabovethatprofessionalbodiesshouldnotduplicatetheroleoftheregulator.Bycontrast,othersnotedthatifyouleaveethicsandculturealltoregulation,thiscanbedisempoweringtoemployees.Therecanbeatendencyfororganisationsto‘outsourcetheirthinking’,leavingittosomeoneelsetoworkoutwhatisrightandwhatiswrong,ratherthantakingresponsibilityfordevelopinggoodjudgementthemselves,whichiswhataprofessionalshoulddo.Oneintervieweefromthefirmscharacterisedthisattitudeas:

‘Weknowwhatwe’redoingiswrong,butpleaseregulateusandwe’llstop.Andwecan’tstopuntilyouregulateus.’

74

Theintervieweestatedthat:

Ican’tsubscribetothatview.Ifweknowwhatwe’redoingiswrong,thenwestop.It’squiteparental[theapproachabove].Bankinghasgotthatparentalapproach.

125. Generallyprofessionalbodiesthoughttheywereabletohaveapositiveeffectonthecultureoforganisations,thoughthereweresomecaveatstothis.Someoftheserelatedtotheunevenpowerdynamicbetweenprofessionalbodiesandbanksandbuildingsocieties(seeissue4inthecentralfindings).Inparticular,therewaslittleevidencethatprofessionalbodiesareabledirectlytochallengebanksandbuildingsocietiesonissuesofculture.Againthiscontrastswithothersectors,inwhichstrongerprofessionalbodiesareabletohaveamoreevenhandeddialoguewithemployersinwhichtheycanchallengethemonissues.

126. Therewassomediscussionhereofthe‘organisationalmembership’(asopposedto,orinadditionto,individualmembership)model.Someoftheprofessionalbodiesreportedusinganorganisationalmembershipschemetoincreaseengagementfrombanksandbuildingsocieties.Forexample,thetermsoftheschememightincludeprovisionofacertainlevelofsupporttoemployeesseekingaprofessionalqualification.However,itmaybethat,whilethismodelincreasestheprofessionalbody’sabilitytoinfluencebanksandbuildingsocietiesinsomeways,inotherwaysitlimitstheprofessionalbody’sabilitytoinfluenceculture.Iftherelationshipisentirelywithindividualmembers,professionalbodiescaninfluencestandardsonanindividuallevelwhichhasaknock-oneffectonculture.Corporatemembershipdoesnotnecessarilymeanadilutionofstandardsinordertoattractcorporatemembers,butthereispotentialforaconflictofinterestforprofessionalbodieswhousethismodel.

4.4.3 Engagementwithfirms127. Bankandbuildingsocietyintervieweeswereaskedaboutprofessionalbodiesengagingwith

firms,andfelttheywouldlikemoreengagementandwouldbekeentoengagethemselves.

IknowIkeepbangingonaboutthis,butyou’vegottokeepitrelevant….[Myprofessionalbodyhas]workedinpartnershipwithorganisationstomakesurethestandards,thequalifications,aremuchmorerelevantthanhaseverbeenpreviously.”And“nowwiththecostconstraintsyouwanttomakesurewhenyou’repayingforsomethingit’sgoingtobeabsolutelyrelevantandworththemoney.Ithinkwe’verealisednowthatpartnershipapproachworkswellforbothofus.

128. Anothersaid,‘I’mverykeenthatweworkasapartnershipwiththem.Sotheydon’tgo“thisiswhatwedo,takeitorleaveit.”Wedon’twanttodilutestandardsortherobustnessofwhatpeoplecanachieve,butwewanttoworktogether.’

129. OnefirmhasenteredintoadeeprelationshipwithaprofessionalbodyandaUniversitytodevelopasetofprofessionalqualificationsforitsemployeeswhichhaverobustexternalratification.

130. Akeyissueforprofessionalbodiesarisesfromthequestionofwhichindividualsinorganisationstheyareabletoengagewith.WefoundthatprofessionalbodieswereengagingwiththelearninganddevelopmentandHRfunctionsmuchmoreoftenthantheywereengagingwithhighermanagementandthe‘C-suite’.Thismayreflect,butalsocontributeto,thetendencyforbanksandbuildingsocietiestoseethemasprimarilytrainingproviders.Inturn,thispotentiallyaffectsthekindofinfluenceprofessionalbodiescanhavewithinbanksandbuildingsocieties.

75

131. Therewasasensethatsomeofthelargerorganisationsmaythink(rightlyorwrongly)thattheycansavecostsandgetamoretailoredofferbyconductingtrainingin-house.

132. Oneintervieweereportedthatbanksandbuildingsocietiesmayneedhelpinmatchingtheircompetencyframeworkagainsttheprofessionalbody’squalificationsoffer.Thispersonreportedthatsometimesthepeopletheywerespeakingtoinbanksandbuildingsocietieswerenotawareoftheirowncompetencyframeworkandiftheywere,mightnotseetheconnectiontoprofessionalqualifications.Inasimilarveinabankorbuildingsocietyintervieweewaskeenonsuchhelp:

They’vemappedthecontentacrosstotheirqualification,andthecompletionofoneofourswillgiveourcolleaguetencreditpoints,whichisathirdofthewaytowardsa[professionalqualification].Notforeverything,butfortherightthings,that’sprettyattractive.

133. Barrierstoeffectivenesscanarisefromculturalissuesinbanksandbuildingsocieties.Wespoketoaprofessionalbodyrepresentativefromoneofthemoreestablishedprofessionswhonotedthecontrastingrelationshiptheywereabletohavewithprofessionalfirmsascomparedwiththatwithbanks.Thisarosefromacontrastinthecultureofthetwotypesoforganisations–professionalfirmshaveasenseofsharedvaluesandobjectiveswiththeirprofessionalbody.Bycontrast,banksandbuildingsocietieshavetendedtoseeprofessionalbodiesassupplierswithwhomtheyhaveatransactional,commercialrelationship(seeissue4inthecentralfindings),eventhoughsomefirmsnowclearlydesireadifferentkindofrelationship.Again,thefactthatbankingqualificationsarenotmandatorymaymeanthatbanksandbuildingsocietiescanexercisemoreleverageoverthecontentofferedbyprofessionalbodies.

4.4.4 Fragmentationofthesectorandprospectsforgreatercoordination134. Bothbanksandbuildingsocietiesandtheprofessionalbodies(bankingandbanking-related)

tendedtoagreethatthenumberofprofessionalbodiescurrentlyoperatinginthesector,andthelackofcoordinationbetweenthesebodies,wasabarriertotheireffectiveness.Theresultsinthissectionrelatetoissue3inthecentralfindings.

135. Onthenumberofprofessionalbodiesinthesector,manyintervieweesfrombanksandbuildingsocietiesdidnotknowtherewerenineteen(seeAppendixAfordetails)andweresurprisedatthequantity.Mostwouldliketheretobefewer,thoughnotmanysaidtheywouldfavourasingleprofessionalbody.Oneworryherewasthattherewouldbeamonopolyeffectiftherewereonlyone.Onebankorbuildingsocietyintervieweecommented:

I’mnotsurewhattheentirerangeofnineteenlookslikeandifthey’veallgotcrediblecompetingofferingsinthemarketthenifthosethatwerethestrongerweretosurviveandmaybereceivetheirBankingStandardsBoard’ssealofapprovalofcoursematerial,I’msurethatwouldhelpsothatthey’reaccreditedorauthorisedorsanctionedorapprovedbyBankingStandardsBoard.Thatmightbeawaytogo.

Somethoughtthistiedintotheissueofthevalueofthequalificationsandhavinggold-standardqualifications(seeissue2inthecentralfindings)–ifthereweresomanyqualificationsavailablethiswouldcontributetotheirlackofrecognitioneitherwithinthesectororamongstthegeneralpublic.Onebankorbuildingsocietyintervieweesaid:

Idefinitelythinkitwouldbehelpfulifitwasthatstreamlined,definitelywouldbehelpfulforbankingtohaveitstreamlined,andthenitwouldhavetobereally,reallyclearwhatthestandardsactuallyare.

76

136. Inagreementwithintervieweesfrombanksandbuildingsocieties,professionalbodiesthemselvestendtoadmitthatthenumberofprofessionalbodiesoperatinginthesector,andthedifferentterritorycoveredbydifferentprofessionalbodiescanleadtoaconfusingmarketforqualifications.Giventheoverallproliferationofqualifications,professionalbodiesacknowledgedthatitcanbedifficultforbanksandbuildingsocietiestojudgetheirquality.Theviewsoftheseintervieweesonhowmanyprofessionalbodieswouldbeidealexactlymatchedtheviewsofbanksandbuildingsocieties:mostthoughtthereshouldbefewer,butnotmanythoughtthereshouldbeonlyone.

137. Ontheotherhand,twoadvantagestoalargenumberofprofessionalbodieswereidentifiedbyprofessionalbodyinterviewees:

o Healthycompetitionbetweenprofessionalbodiesdrivingupthestandardofqualifications.

o Theneedtocatertothevaryingneedsofahighlydiversesector.

138. Therewasastrongindicationintheinterviewsoverallthatthediversityandnumberofprofessionalbodiesmightalsoleadtoscaleeffectsintermsofwhattheprofessionalbodycouldoffermembersandintermsoftheircapacitytodothingslikethoughtleadershipwhichwassomethingthatbanksandbuildingsocietiessawasavaluablepotentialoffering(see‘thoughtleadershipandnetworking’above).Someprofessionalbodyintervieweesalsonotedthisproblem–withsomanyprofessionalbodiesaround,thereisoftennoconsensusviewavailable.Thesmallsizeofprofessionalbodiesisalsoasourceofsignificantchallengesinengagementwithlargerfirms:alargebankmightrequesttrainingonahugescale,beyondwhatprofessionalbodieshavethecapacitytodeliver.Professionalbodiestendtousefreelancetrainersandcanintheorybringinextratrainerswhenrequired,butthisdependsontrainersbeingavailableinthenumbersrequired,whichisnotalwaysthecase.Thisappearstohaveledtoanincreaseinonlinelearningprovision(seesection4.3.3on‘CPD’above),whichaddressestheissueofscalebutbringsitsownchallenges.

139. Whenaskedaboutthecoordinationbetweenprofessionalbodiescurrently,intervieweesgenerallyidentifiedhealthybutlargelyinformalrelationships,butsomefirmsfeltcoordinationcouldbemuchmoresystematic,perhapsaidedbyacanopybody,assuggestedinthequoteinparagraph135above.Severalintervieweesexpressedadesiretobuildmorerobustrelationships.Thegeneralimpressionisthatthereappearstobecollaborationbutnotinadeeporsystematicway.Forexample,theredoesnotappeartohavebeenanyattemptbyprofessionalbodiestocollaborateonagapanalysisonskillsandqualifications,inordertobuildframeworksamongqualifications.

140. Professionalbodyintervieweesweregenerallypositivetowardstheprospectofmoreclarificationofthecurrentofferandamorecoherentapproachamongprofessionalbodies,withsimplificationofthequalificationsoffered.

4.5 ThefuturefortheprofessionalbodiesinbankingandtheroleoftheBSB

141. Weaskedprofessionalbodyintervieweeswheretheywouldliketheirprofessionalbodytogointhefuture.Themostpopulartypeofanswerrelatedtoraisingtheprofileof

77

professionalisminthesector.Thisisconsistentwiththebankorbuildingsocietyintervieweealreadynoted:

SoIthinktheirprofileislow.Ithinkit’saprofilething.

Manyinterviewsstatedthattheywouldliketogettoapositionwherebythereisanexpectationthatbankerswillhaveaprofessionalqualification.OneintervieweenotedthattheUKisseenasaleaderinfinancialservices,andsoadrivetowardsgreaterprofessionalisationinbankinghasachanceofdrivingasimilarchangeonaglobalscale.

142. Itwasnotedthatchangingthecultureofbankingislikelytobealong-termproject.

143. Wealsoaskedprofessionalbodieswhethertheythoughtqualificationsinbankingshouldbemandatoryforbankers,orforbankersincertainroles(beyondthoseinwhichqualificationsarealreadymandatory).Mostthoughttheyshouldbewhileacknowledgingthattheyhadavestedinterestinsayingso,andalsoexpressingsomeworries:

o Thatprofessionalbodiesmaybecome‘ossified’andcomplacentintheabsenceofaneedtoselltheirservicestobanksandbuildingsocieties.

o Thatbothfirmsandindividualemployeesmayresentprofessionalbodiesifmembershipismandatory,andmayseemembershipasa‘tick-boxexercise’andbereluctanttoengageactively.

144. Bankandbuildingsocietyintervieweesweredividedonthequestionofwhetherageneralqualificationshouldberequired.Anumberwereenthusiastic,butothersmorecautious.Amongstthemorecautious,onesaid:

Thisismaybewheretherubberhitstheroad.IfI’mtalkingasamemberofsociety,Iwouldn’twantmydoctorormyengineernottobeprofessionallyqualified.Sowhywouldn’tIwantanyonewhoisinvolvedwithmyfinancialwell-being,bankorotherwise,myobservationwouldbeitshouldn’tjustbebanks….Myviewfromtheinsidelookingoutwouldbetosay,‘no,pleaseno.’ButIcanabsolutelyseewhyfromasocietalviewIwouldbesaying,‘pleaseyes.’

Anothersaid:

IthinkitshouldbesupportedbutI’mnotsureitwouldberequired.

Andanother:

Possibly,Ithinkthat’sfaircommentastocertaindegreesofauthorityorcertaindegreesofimpactorinfluence.

Andanother:

Ireallydon’tliketheideaofmandatingaqualificationforall.I’dprobablyneedtobeconvincedofwhattheoutcomeisproviding.

4.5.1 TheBSB145. TherewasconsiderablediscussionoftheroleoftheBankingStandardsBoard(BSB),and

whatintervieweeswouldlikethatroletobe.Manyinbothfirmsandprofessionalbodiestalkedaboutsomekindofcoordinationrole–theyfeltaneedformorecoordinationoftheprofessionalbodiesinthesectorandlookedtotheBSBaspossiblyprovidingthat.Onewayto

78

achievethiswouldbetoaccreditprofessionalbodies,ortoratifythemascompetenttoprovidequalificationsorcompetentthemselvestoaccreditthetrainingprovidedinternallybyfirms.Anotherwaywouldbetosetstandardsdirectlyforqualificationsinordertocreatea‘goldstandard’.TheBSBshouldnotbeinterventionistandtrytoregulateallqualificationsacrosstheboard,butcouldsetoutmandatedcontentatahighlevel.Asalreadynoted,onebankorbuildingsocietyintervieweesaid:

Sosomeinfluencefromthatperspective[nudgingfromtheBSB]wouldbegreat.Iwonderifthat’spossible.

146. ItwasthoughttheBSBmighthavearoleindefiningframeworksofqualificationsinordertomakethequalificationsofferclearertobanksandbuildingsocieties.Relatedtothis,oneintervieweethoughttheBSBmighthelptodefinethoseroleswithinbankswhichoughttohaveabankingqualification–i.e.definingwhatisabankingroleasopposedtootherspecialismsandroles.

Certainlyacommonframeworkaroundstandardswouldbeveryuseful.Andthat’scertainlytheinvolvementtheBSBmaywanttotakeon.Andtoprovideclearerdirectiontotheindustryaroundexpectationsthere.Idon’tthinkit’snecessarilythecasethatitwillbeservedbyasinglequalification,butcertainlyasinglesetofstandards…Ithinkwouldbegood.

147. Oneprofessionalbodyintervieweetalkedaboutthewaybespokequalificationscanbedevelopedforbankswhothenloseinterestaftertheindividualdrivingtheworkleaves.Again,acommonframeworkof‘goldstandard’qualificationssetoutbyanexternalorganisationwouldbehelpfulhere.

Youknowwe’llgetsomeonesaying‘weneedaqualificationincreditriskmanagement’and…we’vegotstafftoputthroughit,we’dreallyloveitforyoutohelpusdevelopsuchathingandwe’llgointhereandwe’lldoit,we’lldevelopareallygoodqualificationandtwoyearsdownthelinethatpersonmoveson.Andthenextpersoncomesinandsays‘nah,Idon’tthinkthat’swhatweneed’.They’llwantsomethingdifferent.Sofromaprofessionalbodyperspective,thatcreateschallengeswithplanningandresourcesandallthatsortofstuff.Andagain,that’smaybewherethebankingstandardsboardhasarole.Whichistotryandachievesomesortoflevelofconsistencywithinorganisationsaboutwhere,peopleperformingtheserolesorthesefunctions,whatisareasonableexpectationandthelevelandcontentoftheirprofessionaleducation.Whichthenorganisationscouldpotentiallybenchmarkthemselvesagainstanduseitasaguide.

148. LookingatcultureacrossthebanksandbuildingsocietiessectortheBSBmightintersectwithprofessionalbodiesinawaywhichwouldprovideacheckforconsistency,perhapsbymeansofsomeover-archingcodeofethics,orsetofethicalprinciplesforbanking,thoughthiswouldhavetobelinkedappropriatelywiththeFCAcodeofconduct,theethicscodesofindividualprofessionalbodies,andthevaluessetoutbyparticularfirms.However,suchasetofprinciplesmightactuallyagainprovidesomecoherencetothisdiversity.Respondentsthoughtitwouldbevaluabletohaveanexternalbodywiththerightkindofreputationandauthority.

149. AnotherbankorbuildingsocietyintervieweenotedthatitneedstobeclearthattheBSBisnotanotherregulator.Thebanksandbuildingsocietiesfeelquiteheavilyregulatedandwouldnotwelcomeanotherbodyinthatrole.Butonebankorbuildingsocietyintervieweewasoptimistic:

79

Ithinkso.Icanseeanecosystemwhereallthree[regulator,PB,andfirm]co-existandhavevaluablepartstoplayinthewhole.

150. TheBSBcouldfocusontheissueofageneralprofessionalqualificationinbankingandaskwhatdowe(asabanksandbuildingsocietiessector)needfromsuchaqualification,whatwouldmakeitmeaningfulandvaluableacrossthesector,andwhattechnicalandethicalcontentshouldithave?TheBSBcouldalsoplayaroleinrespectoftheinternationalstandingandvalueofaprofessionalqualification,notingparticularlytheinternationalnatureofbankingandofmanybanksandbuildingsocieties.

151. Anotherpossiblerolewouldbearoundthoughtleadership.ItwasalsosuggestedthattheBSBcouldallowallorganisationsinthebanksandbuildingsocietiessectortohaveavoiceandtosharegoodpractice.

152. Amongprofessionalbodyinterviewees,themostcommonsuggestionwasthattheBSBcouldplayapartingenerallyraisingtheprofileofprofessionalbodiesinordertogetemployersonboardwiththeprofessionalisationagenda.Thismightincludeemphasisingtheneedforbankstoengageactivelyanddeeplywithprofessionalbodies.Theprofessionalisationagendaisnotaboutbanksoutsourcingtheirresponsibilitiesonethicsandculture;theyneedtoengageinaconstructivedialoguewithprofessionalbodiesandbeopentochallenge.Itmightalsoincludechangingtheperspectiveofbanksandbuildingsocietiessothattheyseeprofessionaltrainingassomethingtobeproudof,somethingtheywouldwanttopublicise.Abankorbuildingsocietyintervieweealsohadasimilarkindofthought:

ItisabitofaphilosophicaldebateandwhythenBankingStandardsBoard’sbeensetup.Ithinkit’stryingtomovebankingandfinancialservicesmoregenerallybysaying‘we’reakeypartofhowsocietyworks’ratherthanjustmoneymakingbusinesses.

153. TheBSBmightalsoplayaroleinkeepingtheprocessofculturalchangegoinginthelong-termandcreatingsustainability.Ifthisisseenasashort-termproject,itwillnotbeeffective.

154. AnothersuggestionwasthattheBSBmighthelptosetupchannelsofcommunicationbetweenprofessionalbodiesandregulators,ingeneral,butalsoespeciallyonspecificareasincludingdiscipline.

155. OneintervieweethoughttheBSBshouldhaveastrongsteeringandcoordinatingrole:

IthinkitdoesneedmorecoordinationandIguessperhapsit’sfairtosaythatifthat,iftheindustryandprofessionalbodiescannotdeliveronthatprocess.ThenIthink,absolutely,Ithinkit’sthendowntotheroleofsomebodyliketheBankingStandards[Board]ortheregulatorstosay…‘Wetoldyouwhatyouneededtodobutyouhaven’treallydoneit.’

156. Ontheotherhand,anotherintervieweethoughttheBSB’sapproachshouldbetousegentlepersuasionratherthanbeingdictatorial,inasimilarwaytothebankorbuildingsocietyintervieweequoteaboutnudgingabove:

IgettheimpressionthatalotofwhattheBankingStandardsBoardistryingtodoisbygentlepersuasionandnotbeendoingtoodictatorialorprescriptive.NowIthinkit’sgottobebygentlepersuasion,bypeerpressure,bysuggestingthatallthebanksdoitthenthey’llworktogethertoraisestandards.IfonedoesitthentheremightbeanoutlierthattheymayormaynotfeelcomfortablewithsoIthinkthat,it’sgottobethatsortofgentlepersuasionthat…stemsfromthebanksthemselves.

80

157. StakeholderintervieweeswereenthusiasticaboutthescopefortheBSBtouseitsprofiletopromoteprofessionalismandtheworkofprofessionalbodies,andtodriveengagementfrombanksandbuildingsocieties.

TheBSBhaveawonderful,wonderfulopportunitytopromoteandhighlighttheworkofprofessionalbodiesbecauseasIsaythey’rekindofunderutilisedandprobablyunderrecognisedatpresent.TheBSB-becauseithasn’tgotstatutorybacking,that’snotwhatitis-butitcameoutof…theParliamentaryCommissiononBankingStandardsandtheLambertreview.Soit’sgotathreadrunningbacktoParliamentifyoulike,andthatgivesithugeprofile,andthebudget,obviouslymeans…thatthey’reverygoodatgettingmediacoverage,theirbudgetismassivecomparedtotheonethatIhavegotforexample…WiththevoiceandtheprofilethattheBSBhave,Ithinkthey’vegotawonderfulopportunitytopromoteandsupportactiveinitiatives.

Iknowthattheywanttoestablishthebasicsandunderstandthislandscapebeforetheystartofferingopinionsbuttheyaretheonesthatwillbeinstrumentalinsupportingthegrowth,theuptakeofandtheservicesofprofessionalbodiesbecausethey’vegottheearofthechairman,they’vegottheprofile,they’vegotthevoiceandIdothinkthattheyhaveawonderfulopportunitytopromotethisaspectofbanking.

4.6 Professionalbodiesinbankingandacommunityofinterest158. Severalquestionsarisefromtheaboveastohowprofessionalbodiesinbankingand

buildingsocietiesa)movebeyondbeingperceivedassimplysellersofqualifications,b)developagoldstandardlevelofqualification(s)becomemoreeffectiveinaffectinglevelsofethicalbehaviourandcontributingpositivelytothecultureofbanking,c)helptoembedtheideaofthesocialpurposeofbanking,d)facilitatethesharingofbestpracticeacrosstheindustryande)achieveacoherentvoiceinthoughtleadershipfortheindustry.

159. Oneideathathasbeenincipientinanumberofthequotesaboveistheideathattheprofessionalbodiesinbankingandbuildingsocietiesneedtofoster‘communitiesofinterest’andthatthiswillcontributetoachievingsomeofthegoalsabove(andperhapsotherstoo).

160. Beforeturningtoconsiderwhatcanbelearntaboutprofessionsas‘communitiesofinterest’fromotherprofessions,weconcludethissectionbybrieflyreviewingagainthreeorfourquotesfromtheinterviewswhichpointinthisdirection.

161. So,onebankorbuildingsocietyintervieweesaid:

Icanseethevalueofthestructurethat…theGMC[GeneralMedicalCouncil]have,thatyouhaveonebodyacrosstheindustrythatsays‘here’sthestandards,here’sthequalificationsyouhavetohavetobeabletopracticeinthisarena,andhere’stheongoingwayofworking.’Thereisastrongsenseofcommunityandbelongingandprofessionalismand‘we’reallinitbecauseofthis’.Ithinkthatwouldbetomeaveryusefulbenchmarkmodel….

Andanothernoted:

Ithinkthatcommunitycanonlybehelpful,andsharingbestpractices,thatcanonlybe[conducive]toabetterculture.

Aprofessionalbodyintervieweealsofocusedonthenotionofacommunity:

81

There’saroleforprofessionalbodiesin…helpingpeoplefromdistantorganisationstocometogetherandsharebestpractice.AndoneexampleIwastalkingtooneofourseniormembersaboutrecently,whenhewasagraduatetraineewithaverylargebank,theyhadveryregular,atleasttwoorthreetimesayearallofthegraduatetraineesonthatparticularcohortwouldgettogetherforagraduatetraineeweekend….Hesaidhowusefulhefoundthatasayoungentrantintothebankingsector,becausetherewasacommunityofpeoplewhoweregoingthroughsimilarkindsofexperiencestohimbutpotentiallyindifferentsectorsofthebank….Hethoughtitwasareallygoodwayforhimtounderstandwhatotherpartsofthebankweredoingandhefeltlikethatwasareallyprogressivethinganditwas[something]thatdidn’treallyhappennowthatgraduatetraineescameintoorganisationsandwereimmediatelytold‘you’reinrisk,you’reinsuppliers,you’regoingintocommercialbanking’andtheywerestreamedoffandthatcommunityaspecthadbeenlost.

Athirdbankorbuildingsocietyquotedevelopedtheidea,aswesawearlier:

Itwouldbeabsolutelyamazingtohaveaprofessionalbodythatwascreatingamuchstrongerdialoguecollectivelyacrossthebanksasopposedtofinancialservices:Whatareweherefor?Howisitworking?Whatarewestrugglingwith?Itcreatesasenseofbelongingandunitythatwe’redoingsomethingusefulthatisworthtalkingaboutratherthanbeingbeatenbytheregulator.Themorewecangetthedialogueoutandstartreallyhelpingnotjustotherbanksbutsocietyingeneral,Ithinkthere’sastrongersensecreatedthatremindsyouofstewardshiponbehalfofsocietyandmorethanthatobligationto.

Thisseniorbankorbuildingsocietyintervieweelinkedthisconceptionofaprofessionalbodytowhatpeopleworkinginbankingnowseek:

Mostdoctorsfeelonobligationtodotheirjobtothebestoftheirabilitybecausethey’reworkingonbehalfofabroaderpurpose.Idon’tthinkthatexistsinbanking.Ithinkit’sfeasibleitcould.ButIthinkthepeopleinbanking,particularlytheyoungergenerationthat’scomingup,areseekingmoremeaningfromwhatthey’redoing.They’renotjustinitforthemoney.

162. Weturnnowtotheinsightsgainedfrominterviewswithnon-bankingprofessionalbodies.

82

5 ComparisonswithotherprofessionsInordertoreflectonthepossibleroleforprofessionalbodieswithinthebankingsectorinimprovingethicalbehaviourandculture,itisusefultoconsiderthecontributionmadebyprofessionalbodiesinotherimportantareasofworkinglife,andtocomparehowsomeoftheissuesforprofessionalisationinbankingareaddressedinotherprofessions.Fortheresultsinthissectionweconductedinterviewswithanumberofnon-bankingprofessionalbodies,aswellasundertakingdeskbasedresearch.

First,wepresentsomeperspectivesfromotherprofessionsonspecificaspectsoftheroleofprofessionalbodiesinprofessionalisation.Thenwesetoutsomegeneralconclusionsaboutwhatmakesforaneffectiveprofessionalbody,withaparticularviewtowhatthebankingsectorcanlearnfromtheotherprofessionswehaveinvestigated.Thisincludestwopossiblemodels–the‘engineeringmodel’andthe‘hospitalmodel’–aspectsofwhichmightprovefruitfulforthebankingsector.Weconcludewithasectionwhichreturnstothenotionofaprofessionalbodyasacommunityofinterest,assomethingwhichprofessionalbodiesinbankingmaywishtoconsider.

Comparisonswithotherprofessionsarepresentedintabularformattheendofthissection.

5.1 Results5.1.1 Qualificationsandtraining5.1.1.1 Accreditationofqualificationsandtraining

Theapproachtotheaccreditationofqualificationsandtrainingdiffersgreatlybetweendifferentsectors.

Insomeprofessions,eitherprofessionalbodiesorregulatorsmayaccrediteitherindividualcoursesorwholeinstitutionstodelivercourses.Inlaw,theSolicitorsRegulationAuthority(SRA)accreditsuniversitiestoprovidelawdegrees.Inengineeringtoo,professionalbodiesaccredituniversitiestoprovideengineeringdegrees.However,incontrasttolaw,itisnolongermandatorytotakeanaccrediteddegreeinordertobeamemberofanengineeringprofessionalbodyorachieveCharteredStatus.Previouslythiswasrequiredbuttherequirementhasbeendroppedinordertobemoreinclusive.(Notealsothat‘engineer’,asopposedto‘CharteredEngineer’,isnotaprotectedterm).However,asamatteroffact‘allofthemajoruniversities’willbeaccreditedwithrespecttotheengineeringdegreestheyprovide.Inmedicineanddentistry,theGMCandtheGDCaccredituniversitiestoprovidemedicalanddentaldegrees(andthesearemandatorytopracticeasadoctor/dentist).Mostactuarieswillnothavecompletedadegreeinactuarialscience.However,completingsuchadegreewillqualifyyouforexemptionfromsomeoftheIFoA’squalificationrequirements.‘Actuary’isnotaprotectedterm,althoughinpracticeitwouldbeveryhardtoworkasanactuarywithouttheIFoAqualifications.Thereisasimilarsituationinaccounting,althoughaccountingdegreesaremorecommonthandegreesinactuarialscience.Inconnectiontothis,itisworthnotingthattheCharteredBankerInstituteismakingeffortstoaccreditsomefinancedegrees.

Insomeprofessions,CPDisalsoaccreditedbytheprofessionalbody.Thisisthecaseinmedicine,dentistryandlaw.However,innoneoftheseprofessionsisitmandatorytotakeaccreditedCPD.Inactuarialscience,theIFoAdoesnotformallyaccreditCPDbyexternalproviders.

83

5.1.1.2 Generalorspecificqualificationswithinprofessions

Asacomparisonwithbanking,weaskedhowgeneralorspecialisedweretheskillsandknowledgerequiredbypeopleworkinginthedifferentprofessions.

TheLawSocietyofEnglandandWalesnotedthatsolicitorshavebeengettingmoreandmorespecialisedovertheyears.Qualificationsstillhaveaverylargegeneralcomponent,buttheresultofthiscanbethattheremightbelargeareasofknowledgefallingoutsideyourspecialismthatyoudonotrevisitfollowingqualification.

Inqualificationsinengineering,lawandmedicinethereisapatternofstartinggeneral(thatiscoveringasetofmaterialswhichallengineersordoctorscover)andthenspecialising,althoughtheproportionofgeneraltospecialistcontentvaries.Forexample,inengineeringtypicallyjustthefirstyearofadegreeisgeneral.Inmedicine,thefirstsevenyearsarelargelygeneral(inthissenseofbeingmaterialswhichalldoctorscover).

Inintellectualpropertylaw,thelegalknowledgeandskillsarelargelycommontoallprofessionals.However,individualshavespecialismsintermsofthetypesofintellectualpropertytheyworkwith.Forexample,apatentattorneymightqualifyasanengineerbeforemovingintoIPlaw,andwouldthenspecialiseinengineeringpatents.

Intervieweesfrombothamedicalandafinancialprofessionalbodystressedtheimportanceoftheprofessionalandethicalaspectsofthegeneralcomponents:

Thosesevenyearsareaboutacquiringyourtechnicalandclinicalskills,yourscienceknowledge,butalsolearningabouthowtobeagooddoctorinthebroadestsense.Sounderstandingaboutthelegal,ethical,operational,andotherexpectationsonyouasaprofessional.Intwoyears,inyourfoundationprogrammes,you’rebeginningtodrilldownbecauseyou’renowinaclinicalpracticesetting.You’reinahospital,you’redoingrotations,intodifferentareasofmedicine,includinggeneralpractice.Soyou’regettingrealexperienceofclinicalpractice….Soyou’rebuildingbothyourtechnical,clinicalskillsandyourbroaderprofessionalpersonalityandskillsets,andafterthat,havinghadanumberofclinicalplacements,you’reabletobegintostartspecialising.

5.1.1.3 Continuingprofessionaldevelopment

ThereisconsiderablevariationinthewaysdifferentprofessionsapproachCPD.Inparticular,CPDisoften,butnotalways,subjecttospecificrequirementsintermsofhours,withthisperhapsbeingalesscommonfeatureofthe‘established’professions(forexample,medicine,lawandaccountancy).Therecouldbeanumberofreasonsforthis.Onemightbethatintheestablishedprofessionstheexpectationthatonewillkeepuptodateissofirmlyembeddedintheculturethatallprofessionalswouldroutinelyexceedmandatoryminimumhoursanyway.Thisisperhapspartofawidercultureofindividualresponsibilityformaintainingstandards:settingaminimumlevelofCPDmightbetakentoimplythattheprofessionalbodyhasresponsibilityformaintainingcompetence,whereasinfactthisresponsibilityproperlyrestswiththeindividualprofessional.TheLawSocietyofEnglandandWaleshasrecentlymovedawayfromacompulsoryenforcementofmandatoryCPDhoursbytheregulator.

Nonetheless,thereisinalloftheseprofessionsarequirementfortheprofessionaltodemonstratethattheyarekeepingtheirknowledgeandskillsuptodate.Interestingly,bothmedicineandlaware

84

intheprocessofinstitutingalicensingregimeinwhichadesignatedpersonwithineachorganisationhasresponsibilityformonitoringandcoordinatingCPDforallmembersinthatorganisation,asystemwhichisalreadywellestablishedinactuarialscience.AstheGMCputit:

There’sacombinationofactiveresponsibilityonthedoctorasaprofessionaltobeengagedinaprocessofannualreviewandreflectionandevidence-gathering,buttheorganisationalsohasaresponsibilitytoensurethatthatishappening-thatthedoctorsarereceivingsupportforthatandthentomakearecommendationaboutthedoctor’scontinuing…fitnesstoholdthelicense.

Incontrastwiththeaboveapproaches,inengineeringtheEngineeringCouncilhasjustintroducedaminimumrequirementforCPD(20hours)whichwillcomeinfrom2017.Previouslyitwasencouragedbutnotcompulsory.Thisisabigchangefortheengineeringprofessionalbodies,whowillberesponsibleforoverseeingit.Theyarecurrentlyworkinghardongettingthemessageouttomembersaboutwhatthismeansfortheminpractice,anddevelopinganinfrastructuretorecordtheCPDundertaken.

Inactuarialsciencetoothereisasystemofmandatoryminimumhours.Thereisalsoadistinctionbetweenthosewhoworkinreservedroles(i.e.thoseroleswhichlegislationprescribesmustbeundertakenbyaFellowoftheIFoA)andthosewhodonot.TheIFoAissuespracticecertificatesforreservedroles.CPDismandatoryforallmembersbutthosewhoneedapracticecertificatehavemorestringentrequirements.

Relatedtotheabove,athemethataroseininterviewswithseveraloftheprofessionswastheneedtoavoida‘box-ticking’approachtoCPD.WhilesettingmandatoryminimumsforCPDcansignalthatitistakenseriouslyandgivethebodyorregulatorabasisforassessingmembers’CPD,itcanleadtoanassumptionthatallthatmattersis‘gettingthehours’.Infact,itiseasytodemonstratethatonehasfilledatimerequirementanditispracticallyimpossiblefortheprofessionalbodytoverifythatthehourshavereallybeenachievedand,ifso,thatthisgenuinelyenabledtheprofessionaltokeephisorherknowledgeandskillsuptodate.PerhapsmoreeffectiveisthemodelwhereprofessionalsareaskedtoactivelyreflectontheirlearningandtheoutcomesoftheirCPD,asintheportfolioapproachnowbeingdevelopedbytheGMC(andoperatedbyengineeringprofessionalbodiesforachievingCharteredStatus).

OneintervieweeacknowledgedthatthereissometimesachallengearoundpersuadingmemberstotakeCPDseriously:

ThereisastigmaIthinkaboutCPDamongstprofessionalpracticegenerally.Andtherecanbethisrathernegativereactionwherepeoplethinkthatthey’reperhapsalittlelonginthetoothandtheyknowwhatthey’redoingandthey’requalifiedandbeingover-regulatedbythisprocess-drivenCPDscheme….There’saculturalpiecethere.There’saculturalpiecearoundgettingpeopletoacceptthatlifelonglearningisnotonlyappropriateandinterestingbutisaresponsibility.

5.1.2 ActiveinvolvementofmembersBecomingagenuinelylivingprofessionalbodyinwhichmembershaveastrongsenseofprofessionalmembershipisachallengeinmanyothersectors.Interviewsrevealedtwodistinctaspectsofsuchdevelopment.

85

5.1.2.1 Engagementwithmembers

Thenumberofvolunteersaprofessionalbodycancallontohelpwithitsworkisbothameasureofitssuccessinengagingwithmembersandameansofincreasingengagement.TwoorganisationswhoseemtobehavingsuccessinthisareaaretheIET(3,000volunteersoutofamembershipof165,000andespeciallytheIFoA(3,500outofatotalmembershipofjust28,000).

Thistypeofengagementisonekeyfactorinfosteringasenseofsharedvaluesanda‘communityofinterest’intheprofession.Itisalsoparticulartoprofessionalbodies(regulators,forexample,clearlywillnotbeabletocalluponvolunteers).However,therecanbeariskof‘toomanyvoices’:

Ithinkwehaveamassiveadvantageasaprofessionalbody…becausewehaveagreatengagementwithourmembers….Anindependentstatutoryregulatorwouldn’thavethebenefitofthat.Buttherearechallengesinthattoo….There’sachallengeinmaintainingabalancedandinformedperspectivearoundtheworld.There’sachallengeinwhoyoulistento.Therearealmosttoomanyvoicesatatimeifyou’renotcareful.There’sachallengeindecision-making….Ithinkthere’samassiveadvantageinhavinganengagedprofession.Youcan’tdoitallalone.

5.1.2.2 Networking

Networkingopportunitiesprovidedbytheprofessionalbodywereidentifiedasausefulaidtocareerdevelopmentforprofessionals,andameansforsharinggoodpracticeandcommonchallenges.

Itwasnotedthatchangesincareerpatternsmeanthatpeopledonottendtostaywithasingleorganisationforallormostoftheirworkinglife.Oneroleoftheprofessionalbody,then,istoprovidecontinuityandasenseofcommunityforprofessionalswhomightmovebetweenemployersquitefrequently.Itwasalsonotedthatnetworksprovidedbytheprofessionalbodycouldhelptoprovidejobsecurity–intheeventofredundanciesprofessionalscanbekeptwell-informedaboutdevelopmentsinthesector,andcanhaveaccesstocontactswhomightbeabletohelpthemtofindtheirnextcareermove.

5.1.3 Overseeingethicalstandards,anddisciplineInmanyprofessions,fosteringacommitmenttoacommonsocialpurpose,andasetofethicalvalues,isanotherimportantaspectofaflourishingprofessionalbody.

Therearevariousapproachestoinculcatingprofessionalswiththeethicalstandardsexpectedofthem.Inmedicineanddentistry,theGMCandGDCsetouttheethicalstandardsfortheprofession,andthesearemadeknowntostudentsonentrytotheUniversity(whichisalsoentrytotheprofession).Studentmembersoftheprofessionaresubjecttotherequirementsandaspirationssetoutintheprofessionalethicscode,fromthebeginningoftheirundergraduatestudies.TheGMCandtheGDCalsolaydownguidelinesregardingtheteachingofthekeyethicalprinciples(fortheprofession)withinmedicalanddentalcurricula.AndthisresponsibilityforinculcatingprofessionalethicsremainsanimportantpartofCPDintheprofessionthereafter.

Inmedicine,theHippocraticOathhaslongencapsulatedkeyethicalprinciplesinmedicineandsomeUniversitieshaverecentlyintroducedceremonieswherecohortsofmedicalstudentsrecitetheoath(oramodernversion)collectively,aspartoftheinculcationofthelevelsofethicalbehavioursetdownbytheGMC.Thisisnotuniversalpracticeatpresent.

Inaccountancy,ethicscontentisbuiltintothecurriculumoverseenbytheICAEWatalllevels.Inassessment,studentsareexpectedtohighlightethicalaspectsofcasesalongsideothermore

86

technicalaspects,thusensuringthatethicsisseenasintegraltoaccountingpracticeratherthanaseparateareaofstudy.

Alloftheprofessionalbodiesweinterviewed(inlaw,finance,actuarialscience,medicine,dentistry,andengineering)hadacodeofethicsorcodeofconduct.InlawtherelevantdocumentistheSRAHandbookwhichincludesasetofprinciplesandacodeofconduct.Codesareusedasthebasisofdisciplinaryproceduresbutalsotogiveadviceandguidancetomembers.Severalintervieweesidentifiedeffortsbytheprofessionalbodyaimedatbringingthecodeofethicstolife.Theseincludedonlineethicalscenario-basedlearningsuchasthatnotedunder‘adviceandguidance’below.TheLawSociety,IPReg,IFoAandtheIETallprovidescenario-basedCPDinethicsfortheirmembers.

Thewaydisciplinaryproceduresaredealtwithisquitesimilarindifferentprofessions.Onenotabledifferenceistheextenttowhichtheresultsarepublished.Forexample,theIETtreatstheoutcomesofdisciplinarycasesinconfidence,whereastheIFoApublishestheoutcomesofallitscases.18Theremayalsobeassociateddifferencesintherobustnessofthedisciplinaryprocesses(e.g.theconstitutionofthedisciplinarycommittee,theresourcesavailableforinvestigatingdisciplinarymatters,andsoon).

Oneofourintervieweesnotedthatthereisachallengeforaprofessionalbodywithaninternationalmembershiptosetstandardsthatwillbemeaningfulindiversesocietiesaroundtheworld.Theremightbeatensionbetweentheneedtoprovidegenuineguidanceandtheneednottoimposevalueswheretheyarenotappropriate.

5.1.4 ReportingandWhistleblowingAssociatedwithbeingpartofaprofessioninwhichthepurposeoftheprofession,anditsstandardsofethicalbehaviourplayacentralrole,istheprofession’sattitudetoreportingissues,orraisingconcerns,and‘whistleblowing’.

Complaintsarehandleddifferentlyindifferentprofessions.However,thereareusuallyclearchannelsforreferralofcomplaintsbetweentheregulatorandtheprofessionalbody(assumingtheseareseparateentities).Forthistowork,therehastobeaclearandsharedunderstandingofthedifferentrolesofthetwoorganisations.Eachmustknowwhenaparticularcasewouldbemoreappropriatelyhandledbytheother,orbythetwoworkinginpartnership.

Oneintervieweenotedthattheyviewedalargenumberofcomplaintsasasignofhealth:

Personally,Iworryifwedon’thaveasufficientflowofcomplaints.Iworrybecauseit’scriticalthatwe’rerelevantinthepublicmind-set.Andthatpeoplearebringingissuestousandwe’redealingwiththem.

Anotherintervieweenotedthecentralimportanceofreportinginmaintainingstandards:

‘Wehavegottopromotetheimportanceofprofessionalself-responsibilityandreportingandraisingofissues.’

Reportingandwhistleblowingisgenerallyseenasacentrallyimportanttoolinthemonitoringandmaintainingofethicalstandardsbyprofessionalbodies–itisperhapsthewayprofessionalbodies18IntheIFoA,ifthemattergoestoadjudication,thatisheldinprivate,andthereisnopublication.However,ifthereisafindingofmisconduct,orareferralfromadjudicationtoatribunal,thesedecisionsarepublished.

87

mostcommonlybecomeawareofincidentswhichrequireinvestigation.Becauseofthis,someprofessionalbodiesmakeitaprofessionaldutytoreport.ThecodesofethicsoftheSRA,theGMCandtheIFoA,forexample,allcontainadutytoreportonotherswhoareinbreachofthecode.Amemberwhoisawareofunethicalbehaviouranddoesnotreport,therefore,ispotentiallyinbreachofthecodethemselves.

5.1.5 AdviceandGuidanceThisaspectofthelifeofaprofessionalbodycanbebothawayofengagingwithmembersandalsolinkedtothebody’sroleinthoughtleadership.

Mostifnotallprofessionalbodiesprovideguidanceintheformofpublicationsonmattersofcentralimportanceintheirprofession,oftenincludingethicalissues.However,notallprofessionalbodiesprovideadvicetoindividualmembers,forexamplethroughthewebsite,byemailorthroughaconfidentialphoneline.

TheLawSocietyofEnglandandWaleshasapracticeadviceservice.ThedivisionofresponsibilitybetweenbodiesisthattheSRAtellspeoplewhattherulesare,andhasahelplinethroughwhichitprovidesadviceoninterpretationoftherules,whereastheLawSocietygivesadviceoverandaboverules,i.e.guidanceandsupportaroundprofessionalethics.Inthejargon,theSRAgives‘practicenotes’,whereastheLawSocietygives‘guidancenotes’.TheLawSocietyalsohasatailoredareaofthewebsite–MyLawSociety–whichgivesinformationandadviceonkeythemes.Thisincludesethicalscenarios.

TheLawSocietyalsoprovidesadvicetoindividualmembers.IfamemberoftheLawSocietysoughtadviceonsomethingthatraisedwider(e.g.firmwide)issuesthatmightrequiretheinterventionoftheregulator,then,

‘Ifthecallerhadaseriousissuewiththefirm,then…theywouldbeshownthevariousoptionstheycouldtake.Butitwouldn’tbetheLawSociety’sjobtointerveneonbehalfofthatprofessionalandtakeupthatissuewiththeregulator.Ifthere’sacomplainttobemade,thenthatwouldbemadebytheindividual’.

BoththeGMCandtheGDCprovideonlineadviceandguidanceandalsoaconfidentialphonelinefororaladvice.

IPReg(whichistheregulatorratherthanaprofessionalbody)doesnotprovideadviceorguidance.Theprofessionalbodiesinintellectualpropertylaw,whiletheydopublishgeneralguidance,donotappeartoprovideadvicetoindividualmembers.TheIETusesanonlinecommunityforengineerstoaccessadvice.Theyprovideanumberofonlineresourcesincludingresourcesonprofessionalethics.Theydonothoweverprovideindividualadvice.TheICAEWprovidesextensivegeneralguidanceandhasaveryactiveadviceline.

TheIFoAprovideadviceandguidanceinanumberofareasbyemailandphone.Forexample,theProfessionalStandardsServicecanadviseon‘interpretingprofessionalortechnicalguidance’.Theyalsousevolunteerstoadviseoninterpretationofregulation:

We’vegothundredsandthousandsofhitsonourexperiencedmember[professionalism/ethics]videomaterial.Andthetake-offhasbeenhuge.We’vegotfirmsusingit.Thisisnotasortofmarketingmodebutwhatthistellsmeisthatthereisanappetiteforthis.People…takethisstuff

88

seriouslyandtheywanttounderstandtheseissues.Andtometheformatfeelsright.We’renotpreachingtopeople.We’renottellingthemthisiseasy.We’renottellingthemthereareparticularobviousrightanswerstoeverysituation,butwe’reraisingissuessotheycanbemoreself-awarewhentheyhavetomakehardjudgmentcalls.

5.1.6 ThoughtleadershipTheprofessionalbodiestowhomwespokesawthoughtleadershipasakeypartoftheirrolewithintheirrespectiveprofessions,usuallyassociatedwiththemissionofaprofessionalbody.Obviouslyitcancontributetotheprofileoftheprofessionalbodywithinthewiderpublicmind,aswellasmanifestingthebodyasacommunityofreasoners,abodyexercisingreflectiononthelifeoftheprofession.

Inengineering,thoughtleadershipcanbedifficultinasectorwithalargenumberofprofessionalbodies(36inengineering).Therecanbealackofacoherentvoicespeakingonbehalfoftheprofession.Particularlyproblematiciswhentheinterestsofthedifferentconstituenciesrepresentedbythedifferentbodiesareinconflict.Forexample,onesolutiontoaproblemmightinvolvealotofworkformechanicalengineers,anotherforelectricalengineers,andsoon.Thisisakeyroleforthecanopybodiesinengineering–theEngineeringCouncilandtheRoyalAcademyofEngineering–makingsenseofthediversevoicescomingfromdifferentareasoftheprofession.

Thefocusofpublicengagementcandependonfactsabouttheprofession.Forexample,amajorpartoftheIFoA’sworkisto,‘puttherelevanceofactuarialscienceinthepublicdomain,raisetheprofileofourmembershipcollectivelyandwhatactuariescanoffertheworld.’Thisis‘alittlebitofachallengeaspeopledon’tnecessarilyorintuitivelyunderstandwhatactuariesdo.’Incontrast,publicengagementbytheLawSocietyismorelikelytobearoundspecificissuesofinteresttothepublic.

5.1.7 ThemissionofaprofessionalbodyClearlyifaprofessionalbodyexpectsmemberstobeengagedinitslifeitisimportantthatithasaclearsenseofitsmission,thatthemissionisonewhichmemberscanrecogniseasimportant,andthatitiscommunicatedclearly.

Aswiththebanking-relatedprofessionalbodies,weaskedintervieweesfromcomparatorprofessionswhattheysawtheirprofessionalbody’smissionasbeing.Thiselicitedanumberofdifferentanswers.

• Severalintervieweesthoughtpromotingtheprofessionwasakeypartofaprofessionalbody’smission.

• Oneintervieweenotedtheimportanceofcreatingacommunityofinterest,andofspeakingonbehalfoftheprofessionwithoutbeingalobbyingorganisation.

• TheGMCstraplineis‘workingwithdoctors,workingforpatients.’

• Anotherintervieweesaidthefollowingwhenaskediftherewasatensionbetweenmaintainingstandardsandgrowingthemembership:

Wehavedebatedthatbutit’sbeenveryclear.There’snoargumentaboutthebasicpropositionwhichisthatthepriorityisthe[maintainingstandards].Wedon’tcompromiseonstandards,otherwisewesimplydie.Welosetrackofwhatwe’reaboutandifwedothat-We’reaboutvery,veryhighquality,professionalpeoplewhocanbetrustedandreliedupon.

89

Ontheotherhand,wewanttospreadthatmessageandwewanttomaketheprofessionmoreaccessibletopeoplewhowantto,andarecapableofmeetingthosestandards.We’renotforprofit,sowe’renotfinanciallydriven,inthatsense.Butpartofourremitasoneofthetwobiggest[professionX]bodiesworldwideisifyouliketorepresent[professionX]…globally,themorewecancontributebygettingourmessageoutthere,themorepeoplewecanbringonboardattherightlevelintermsoftherightstandards.

• Anotherintervieweesuggestedthatasenseofprofessionalidentityiskey.Thenotionofthemissionofaprofessionalbodyasbeingtoservethepublicinterestmayberelevanthere.Theintervieweeobservedthatalllawyershave‘asensethattheyareofficersofthecourt’.Thisisanethicallyrichideathatincludesnotionsofsocialpurpose,thepublicinterest,theinterestsofjustice,andsoon.

5.1.8 EngagementwithemployersTherewassomediscussionofprofessionalbodiesengagingwithemployersdirectly.Mostoftheprofessionalbodieswithwhomwespokehadsomeformofrelationshipwithemployingorganisationsaswellaswithindividualprofessionals.However,theprimaryrelationshipforallofthemwaswiththeirindividualmembers.ThefocusoftheLawSocietyofEnglandandWalesinparticularisverymuchonengagingwithindividualmembersasopposedtofirms,andtheprimaryfocusoftheGMCandGDCiswithindividualregistereddoctors.

IPReg,astheregulatorforintellectualpropertyattorneys,regulatesbothindividualsandfirms.

Someoftheprofessionalbodieshavespecificschemesaimedatemployingorganisations.TheIEThasa‘CorporatePartners’scheme.Thishelpsthemtorecruitmembersbuttheyalsoworkwiththeorganisationsonchannellingmembersintoprofessionalregistration.Theyarealsoabletoprovidespeakerswhocangointoorganisationsandspeakonspecifictopics.TheIFoAhaveanew‘QualityAssuranceScheme’whichaccreditsemployers,‘lookingatwhatsupporttheygivestudents,CPDrequirements,whatkindofpoliciestheyhaveinplace,whistleblowing,awholerangeofthings.’

5.2 ModelsfromotherprofessionsthatmayserveforcomparisonAsnotedattheoutsetofthissection,inconsideringprofessionalisationinbanking,andtheroleofprofessionalbodiesinsuchaproject,itmayalsobehelpfultoconsiderthefollowingtwomodelsfromotherprofessions.Considerationofthese‘models’aroseinthecourseofreflectiononbothourinterviewsandourdesk-basedresearch.

5.2.1 The‘engineering’modelEngineeringmayperhapsbeaprofessioninwhichtheroleofprofessionalbodies,togetherwith‘canopy’bodies,couldprovideahelpfulmodelfortheprofessionalisationofbanking.

Asinbankingthereisaverylargenumberofengineeringprofessionalbodies(orprofessionalinstitutes),morethanthirtyintotal.Someoftheprofessionalinstitutesareverylarge(theIEThasmorethan160,000members)andquiteanumberrathersmallwithfewerthan10,000members.

However,thereare,inaddition,two‘canopybodies’theEngineeringCouncilwhichhasaboardwithrepresentativesfromallthirty-sixprofessionalinstitutes,andtheRoyalAcademyofEngineering,whichrecognisesdistinctionintheprofessionasawhole.Neitherareprofessionalinstituteswithmembers–theRoyalAcademyofEngineeringhasFellows--butbothplayanoverarchingrolefortheprofessionandcontributesignificantlytothedevelopmentofprofessionalstandards.

90

ThustheEngineeringCouncilaccreditstheprofessionalinstitutesasthemselvescompetenttocarryouttheirprofessionalroles.SothecouncilaccreditstheIET,forexample,asinturnitselfcompetenttoaccreditUniversitydegreeprogrammesordevelopingCPDactivity.TheEngineeringCouncilalsosetssomecommonstandardsintheUKSpecification(UKSpec),whichmustbeadheredtoinallengineeringdegrees.

SowhilethereisconsiderablediversityregardingtheknowledgerequiredtobecomeanengineeringprofessionalonesignificantmodeofentrytotheprofessionisthroughUniversitydegreeprogrammeswhichareaccreditedbyaprofessionalbody(IMechEforMechanicalEngineering,BritishComputingSocietyforComputerScience,IETforElectricalandElectronicEngineering,andsoon).Whilstindividualprofessionalbodiesaccreditparticulardegreeprogrammes,theEngineeringCouncilseekstoensurecomparablestandardsacrossthemall.

Thestructureofprofessionalqualificationsinengineeringisalsoapotentialmodel.Ontheonehandthedegreelevelqualificationshaveabalancebetweengeneralengineeringknowledgewhichisdeliveredinthefirstyearandmorespecialistknowledgeinlateryears.

However,theengineeringprofessionalbodiesalsooffertiersofqualifications.TheIETforexampleoffersfourtiersfromanapprenticeleveltoCharteredEngineeranditisnolongerarequirementtohaveadegreetobeamember,ortoacquireCharteredstatus.Sothereisaflexibleframeworkofqualificationsandlevels,andasimilarsortoftieredapproachmightworkforbanking

Anotherpotentialareaofcomparisonconcernstheroleofprofessionsinraisinglevelsofethicalbehaviour.Inrecentyearsindividualengineeringprofessionalinstituteshavetakenanincreasinginterestinprofessionalethics,butthishasbeenfosteredtoasignificantextentbythetwo‘canopy’bodies,theRoyalAcademyofEngineeringandtheEngineeringCouncil.

TheRoyalAcademyofEngineeringlauncheditsstatementofethicalprinciplesforallengineersin2005(relaunchedin2007).Therewascloseco-operationwiththeEngineeringCouncilinthisdevelopment.Individualprofessionalbodiesalsotendtohavetheirowncodesofethics,andlargeengineeringfirmsmightwellhavetheirowncodesofconductorethicstoo.However,theaimisthatallsuchcodesshouldatleastbeconsistentwiththeoverarchingstatementoffourmainprincipleswhichhasbeensetoutbytheRoyalAcademy.

AsnotedabovethediverseprofessionalbodiesinengineeringhaveresponsibilityfortheirmembersCPD.However,theEngineeringCouncilaccreditsthemtoprovideitandithasnowintroducedacommonminimumrequirementfortwentyhoursayearacrossallthediverseinstitutes.

Theengineeringinstitutesalsohaveresponsibilityfortheirmembers’disciplineandthisshouldcoverbothprofessionalcompetenceandethicalbehaviour.Thisisanareawheretheremaybesomedifferencesfrombankinginthatthereisnotalargeregulatoryenvironmentinengineering,sonotthechallengeofintegratingthedisciplinaryproceduresoftheprofessionalbodieswiththeroleoftheregulatorsinthatregard.

Butintermsoftheirprocedures,whilstprofessionalbodiesinengineeringcanremovecharteredstatus,orexpelamemberfrommembership,thisdoesnotpreventthatpersonfromcontinuingtopracticeasanengineersotheforceofthedisciplinarypowersisperhapssomewhatlessstringent.Perhaps,also,theconsequentimpactontheethosoftheprofessionasawhole,andprofessionalethics,isnotasgreatasthatwhichprofessionalbodiescanachieve,inprinciple,inareassuchasmedicineanddentistry.Sothis(theengineeringcase)thismightbeclosertothecurrentsituationwithinthebankingprofessionalbodies.

91

Theplethoraofprofessionalbodiesmayraisechallengesregardingtheireffectivenessinworkingwiththeengineeringindustry,aswellasintermsoftheprofileofaprofessionalengineerinthepublicmind.Asnoted,theEngineeringCouncilhasaboardonwhichall36engineeringbodiesarerepresented,inordertofacilitatecoordinationbutitwassuggestedinourinterviewsthatthesizeofthisboardcreatesachallengeforeffectivedecision-making.

Partnershipsbetweenprofessionalbodiesisanotherimportantissue,notleastintermsofcreatingpathwaysforqualifications.Itcanpreventtheneedforindividualstobemembersofmorethanoneprofessionalbody.TheIETnotedthattheyareworkingwiththeCharteredManagementInstitutetoofferjointqualificationsforengineersworkingasmanagers.ThiswouldenableIETmemberstoattainandCIMqualificationwhilststillbelongingtojustoneprofessionalbody.Soprofessionalbodiesinengineeringarebeginningtoaddressthischallenge.

Thenumberofdifferentbodiesinengineeringalsocreatesachallengeforthoughtleadership,asnotedearlier,owingtotherangeofdifferentvoices,andhereagainthecanopybodiescanhaveanimportantroleinseekingtodevelopcoherentmessagesfromtheprofessionasawhole.

5.2.2 The‘hospital’modelThe‘hospital’modelpresentstheideathattheroleofprofessionalbodiesinprofessionalisinglargebanksandbuildingsocietiesmighthaveananalogywiththeroleofprofessionsinlargehospitals.

Inbriefoutlinethethoughtisthathospitals,likelargebanks,areorganisationswhosefunctioningdependscentrallyontheworkofmedicalandhealthcareprofessionals,butalsorequireslargenumbersofotheremployees,fromITprofessionalstofinancialandHRprofessionals,forexample.Inaddition,hospitalsalsodependonthecontributionofthoseoutsideprofessions,suchasporters,kitchenstaffandsecuritypersonnel.Alsowithinthemedicalstafftherewillbeawiderangeoflevelsofexperienceandexpertise,fromconsultantsthroughtocareassistants.

Inasimilarway,banksdependonaverywiderangeofemployeesandwithinthefinancialpersonneltherewillalsobeaverybroadrangeofexperienceandexpertise,fromcounter-stafftoseniorbankers.Soonequestionthatarisesfromthisperspectiveishowbroadlytherequirementthat‘all’staffinbankshaveacommonprofessionalqualificationinbankingshouldbeunderstood.Foritmightbesaidthatinahospitaltherearemanystaffwhoarenotexpectedtohaveanyprofessionalqualificationwhichprovidesthemwithaverygeneraltechnicalcompetencewithrespecttotheproperfunctioningofahospital;andthatevenwithinthemedicalandnursingstaffthereisnocommonqualificationwhichallhold.

Itmightofcoursebethecasethattheprofessionalisationofhospitalswouldbenefitiftherewassomecommonqualificationrequiredofatleastallmedicalandhealthcarestaff.Itmightbethecasethatthecontentsofthiswouldbelargelyfocusedondevelopingabasiccommonunderstandingoftheethicalandregulatoryframeworkforhospitals,andmuchlesson‘technical’matters.

Itmightalsobethecasethatanimplicationofreflectiononthe‘hospital’modelwouldbetonotethattheethosoftheprofessionalmedicalpersonnelisatthecentreofaproperlyfunctioninghospitalandbycontrastwhatislackingfromalargemulti-disciplinarybankingfirm,orbuildingsociety,istheprofessionalethosofbankingprofessionals.Thenonthisviewthemodelwouldsuggestthattherewasaneedforallorprettymuchalloftheemployeesworkinginthe‘banking’functionsofthebanktohaveacommonprofessionalqualificationwhichwouldmeetthecurrentlack.

Aswiththeengineeringmodel,then,thismodeldoesnotleadtoanydirectimplicationsonhowtomakechangessothatprofessionalbodiescanenhancelevelsofethicalbehaviourandtechnical

92

competenceinbanksandbuildingsocieties,butprovidesaframeforconsideringpossiblewaysforward.

5.3 AchievingacommunityofsharedinterestsInarecentdissertationsubmittedtotheUniversityofLeeds,RebeccaDoodsonreportsLordBenson’scriteriaforaprofessionsetoutin1992whereBensonstatesthat‘aprofessionmustbecontrolledbyagoverningbody,actinginthepublicinterest,which(amongotherthings):

• Setsadequatestandardsasaconditionofentry• Ensuresthattrainingandeducationcontinuethroughoutamember’sprofessionallife• Setsethicalrulesandstandardsdesignedforthepublicbenefit,higherthanthose

establishedbythegenerallaw;and• Takesdisciplinaryactionagainsttransgressors.

Doodsonnotesthat,‘thesedutiesareverysimilartothethreepillarsofprofessionalregulationsetoutbytheProfessionalAssociationResearchNetwork(PARN),whichare:

• Entrystandards• Complaintsanddiscipline• CPDandpositivesupportsforethicalbehaviour’19

However,DoodsongoesontocitePhilipMawerwhoidentified‘anadditionalpillarofprofessionalism–thecultureofaprofession…and[who]notesthat‘initialtrainingandCPDneedtobeseen,notjustasbeingabouttheacquisitionofskillsbutasbeingabouttheshapingofmembersinthecultureofaprofession.We[theIFoA]arenotinthebusinesssimplyoftrainingbutofformationofmembersinthevaluesandexpectationsoftheProfessionofwhichtheyseektobe,thenare,aproudpart.’20

TheseideasarehelpfulinthinkingabouttheaspirationsthatProfessionalBodiesinthebankingsectormighthave,throughwhichtheymightmeettheneedsidentifiedbyfirmsinourresultssectionabove.Forthesethoughtspointtowardstheconceptionofaprofessionalbodyasmuchmorethanamereprovider(orseller)ofqualifications,butacommunityofinterest,orinCheshireCalhoun’sphrase(inanothercontext),a‘communityofreasoners’,andpartofthesocialcapitalofsociety.21

Thisricherconceptionofaprofession,asMawernotes,givesacontexttotheprovisionofqualificationsandCPD,andtotheotheractivitiesofaflourishingprofession,ofservingtheformationofthemembersoftheprofessionwiththegoalthatthosememberscantakeprideinthatprofessionandthuswishtobeactivemembersoftheprofessionalbody(literallylimbs–Latin‘membra’).Inbeingactivemembers,andthroughtheconceptionofsocialpurposearticulatedbytheprofessionalbody,themembersaretherebyenabledtoserveboththeirfirms(inthecaseoftheactuarialprofession)andwidersociety.

Tofleshoutthisviewalittle,itispossibletodrawonthemainpointsthatwerenotedaboveinsettingoutourresultswithrespecttothecomparisonswithotherprofessions.

1.Ifbecomingamemberofaprofessionalbodyisconceivedasenteringonaprocessofformationwithintheprofessionthenthemissionoftheprofessionalbody,inwhichthesocialgoalofthe

19Doodson(2016);quotingBenson(1992)andMawer(2010).20Doodson,ibid,citingMawer(2010).21Calhoun(1995).

93

professionissetoutwillbeacrucialstartingpointsincethepurposeoftheformationwillbetoenablethemembertoservethatmission(andwidergoal).

2.Inthelightofthemissionitwillbepossibletoidentifythekeyethicalconsiderationswhichanyoneengagedinthatprofessionneedsparticularlytoattendtoinvirtueofsalientfeaturesofthatprofessionalactivity.So,forexample,giventhattheconductofmedicineoftennecessarilymakespatientspeculiarlyvulnerabletotheirdoctors,whetherphysicallyorpsychologically,theinjunctiontodonoharmwillbeparticularlyappropriatetoconductinthatprofession.Inasimilarway,giventhatthebasicactivityofbankinginvolves(veryroughly)takinginfundsfromsaversordepositorsandallocatingthemtoborrowersorinvestors,withappropriatejudgementsofrisk,therequirementtoactinatrustworthymannerwillbeacentralconsiderationinundertakingthatasaprofessionalactivity.

Understandingaprofessionasamatterofformingmemberswithinaprofessionalbodyhelpstoexplainwhyfosteringinmembersaneyeforthemissionofthebodyandanalertnesstoethicalconsiderationsneedtobecentralactivitiesoftheprofessionalbody.

3.ThisconceptionofaprofessionhelpsthentoinformthesettingofappropriateentrystandardsanddeliveryofappropriatequalificationsandCPD.Thesecannowbeunderstoodascontributingtomemberformation.Theconceptofformationimpliesanappropriatestageddevelopmentwithrespecttowell-designedqualificationandcontinuingprofessionaldevelopment.Italsounderpinstheviewthatsuchactivitydoesnotcease,sincebothkeepingontopofskillsandethicalformationarelifelongmatters.

4.Theconceptofformationinaprofessionalsothenhelpstoexplainthesignificanceofacommunityofmembers.ForasAristotleobservedalongtimeagohumansare‘gregarious’beings,thatisweflourish,orrealiseourpotentialthroughappropriateinteractionswithoneanother.Andtheprocessofformation,ordevelopmentof(professional)characterisaparadigmexampleofsuchgregariousorcommunalactivity.Thusasmembersreachappropriatestagesofdevelopmenttheiractiveengagementwithinthebody--participatingingivingadviceandguidance,aswellasreceivingthem,sharinggoodpracticeinnetworking,contributingtothoughtleadership–allcontributenotonlytotheirowncontinuingformationbuttotheformationofotherswithintheprofession.

Thecommunalnatureofthisformationalsounderpinssharedownershipofanethicalcode,whichinvolvesfindingwaysformemberstoengagewiththatcodesothatitisgenuinelysharedandliving(andthusethicstrainingneedstofosterjudgement,notjustgoinoneearandouttheother,asoneseniorbankorbuildingsocietyintervieweeobserved).AnditexplainsthevalueofcommunalarticulationofsomethinglikeaHippocraticOath.Obviouslysuchactivitiesneedtobehandledcarefullytoavoidbecomingmereritual,butifdonewelltheycanbotharticulateandembodycommunalformation.

5.Fromtheperspectiveofindividualformation,activitiessuchasraisingconcerns,disciplineand(inextremis)whistleblowingareallpartofacommunalcommitmenttomemberdevelopmentinthattheyarenecessarypartsofupholdingtheethicalstandardsandpursuingthemissionoftheprofession.Articulatingacommitmenttoethicalvaluesandstandards,aswellaspractisingskills,ispartofformationinethicalvaluesandskills,justascallingattentiontofailingsinotherscanbepartoftheirformation.Thismakesintelligibletherequirementtoraiseconcernsaspartofsomeprofessionalcodes.

6.Asalreadyhinted,thoughtleadershipbyaprofessionalbodycanalsobebothanopportunityforabodyofcommunalreasonerstoengagewiththeirprofessionalmission,andwhatitrequiresintermsofethicalbehaviourorskillsdevelopmentinchangingcircumstancesorfornewchallenges,andanembodimentofthemasacommunity.Thisrepresentstheprofessionasalivingbody.

94

Oneoftheobjectionssometimesraisedtoprofessionalbodiesisthattheycanberatherconservative,stuckintheirways,stiflinginnovationandcreativity,butonthisconceptionitcanbeseenthat,functioningasacommunityofreasoners,focusedonasharedvisionofthepublicinterest,aprofessionalcanstimulatecreativityandinnovation.Thus,forexample,theprofessionprovidesanopportunityforitsmemberstoworkoutsidetheirworkplacewithfellowmembersintheirownspecialistareaaroundriskprofessionalism,oraccountancy,andthiscanbeoptimalfordevelopinggoodpractice.

Soinfactpartofaprofessionalbody’srole,asacommunityofreasonersengagedinthoughtleadership,isthatitcanrefreshentrenchedpractices,andtherebybenefittheformationofindividuals,theprofessionalcommunityasawhole,andfirms.

Clearlythoughtleadershipdonewellisoneofanumberofthingswhichcanhelptoraisetheprofileoftheprofessionandarticulateitsvaluetothewiderpublic.Butthisalsodependsonhavingaclearsenseoftheprofessionalbody’smissionandthewidersocialroleoftheprofession,identifiedearlieraskeyissuesforappropriatememberformation.

7.Thisconceptionoftheprofessionalbodyformingitsmembersalsoshedssomelightontheimportanceofengagementwithfirms.Ontheonehand,theformationofaprofessionalobviouslytakesplacetoalargeextentwithintheindividual’sworkplacenotsimplythroughattainingqualificationsandCPD,soanappropriatelinkbetweenfirmsandprofessionalbodiesisimportanttoensurethattheindividual’sformationisnotfracturedwiththeprofessionrequiringonethingandfirmsanother.(Thisalsoexplainstosomeextentthenotionoftheprofessionasafurtherlensonthecultureoftheworkplace.)Ontheotherhand,individualprofessionalswithinfirmsareaphysicallinkbetweenaprofessionalbodyandafirm,soactivemembersofprofessionalbodieswill,inseekingtolivetheirprofessionallife,necessarilyinfluencethecultureoftheworkplace(andalsotakethingsfromthecultureoftheirownworkplaceintothelifeoftheirprofessionalbody).

5.3.1 SummaryThisisonlyasketchoftheconceptionofaprofessionalbodyasacommunitywithsharedinterests,oracommunityofreasoners,whomtheprofessionalbodyforms.

Butitisapicturewhichhelpstoexplainhowmembersofaprofessioncandevelopasharedlanguageandfostergoodpracticeandasenseofcommonpurposeinwayswhichhelpmemberstodevelopasenseofprideinwhattheydo.Takentogetherthesecaninturncreateanotionofprofessionalidentity,asenseinboththeindividualandtheprofessionalcommunitythatwhattheprofessionaldoesisnotjustwork,butameaningfulwayoflife.

Thisconceptiondoesseemtocoherewiththebankorbuildingsocietyinterviewee’svisionof‘aprofessionalbody[orprofessionalbodies,onemightadd]thatwascreatingamuchstrongerdialoguecollectivelyacrossthebanksasopposedtofinancialservices:Whatareweherefor?Howisitworking?Whatarewestrugglingwith?Itcreatesasenseofbelongingandunitythatwe’redoingsomethingusefulthatisworthtalkingaboutratherthanbeingbeatenbytheregulator.’

Theredoesnotseemtobeanyreason,inprinciple,whyprofessionalbodiesinbankingcouldnotplaysucharole.Ourresearch,setoutintheresultssection,suggeststhattheremaybequitealotwhichneedstobedoneinordertoachievethis,butalsoindicatesthatthereisasignificantbodyofopinion,bothwithinfirmsandwithinprofessionalbodies,whichiskeentomoveinthisdirection.

Theresultsofthisresearchhaveraisedmanydetailedpointsforreflectionanditisnotappropriateatthispointtoseektosummarisethemall.

95

However,somekeypointscanperhapsbementioned,severalofwhichreflectthefivekeyissuessetoutinthecentralfindings.

First,itisimportanttonotethatthefieldofprofessionalbodiesinbankingislargeandquitefragmentary,bringingwithitalargenumberofprofessionalqualifications.Soprofessionalisationofthesectordoesnotrequirealotmorequalifications.Thiscanonlyaddtotheclutter.Simplificationand/orco-ordinationaredesirable.

Whatisrequiredisthatprofessionalbodiesinbankinghaveaclearvisionoftheirmission,andofthesocialroleofthebankingandbuildingsocietysectortowhichtheycontribute.Connectedtothatmissionandrole,itmaybehelpfultoidentifysomehigh-levelethicalprinciplesforthebankingandbuildingsocietyprofession,whichmightbeembeddedinappropriatewaysindistinctprofessionalbodiesandfirms.Withinthatvision(andassociatedethicalprinciples)itmaythenbepossiblefortherelevantprofessionalbodiestodevelopaclearstrategyforinfluencingtheethicsandcultureofthesector,aswellasenhancingtheskillsofemployees.Withinthatstrategyitmaybethatthedevelopmentofasetofgold-standardqualificationsisanimportantgoal.

Butsuchadevelopmentneedstobeachievedthroughworkinginanappropriatepartnershipwiththeindustry,andsuchpartnershipactivitymaybeaidedbytheworkofacanopybody,asintheengineeringsector.Suchabodymighta)helptoconfirmthestatusofa‘goldstandard’qualification(ortierof‘goldstandard’qualifications),b)ratifytheprofessionalbodiesofferingsuchqualificationsc)helptoencouragetheindustrytotakeupqualificationsofappropriatequality,d)performarobustauditroletoensurestandardsofqualificationsandCPDaremaintainedande)supportotherwaysofproductiveengagementbetweenprofessionalbodiesandtheindustry.

96

5.4 Tablesofcomparisonsbetweenprofessions5.4.1 Table3:Otherprofessions–KeybodiesandroutetoqualificationProfession Regulatorybodies Professionalbodiesandothersignificant

bodiesRoutetoqualification

Medicine GeneralMedicalCouncil(GMC).

TheBritishMedicalAssociationismorelikeatradeunionorrepresentativebodythanaprofessionalbody.ThetwentyRoyalCollegesareresponsibleforsettingstandardsandsupervisingtrainingwithinspecialisms,andaretheclosestthingtoatypicalprofessionalbodyinmedicine.TheAcademyofMedicalRoyalCollegesplaysathoughtleadershiprolewithinmedicaleducation.

Typicallyafive-yeardegreeatmedicalschool,thenatwo-yearfoundationprogramme,thenalongperiodofacquiringspecialistexperience.

Law SolicitorsRegulationAuthority(SRA)forsolicitorsinEnglandandWales;

BarStandardsBoard(BSB)forBarristers

TheLawSocietyofEnglandandWalesistheprofessionalbodyforsolicitorsinEnglandandWales.TheGeneralCounciloftheBaristheprofessionalbodyforBarristers.Itisalsotheapprovedregulator,butdischargesitsregulatoryfunctionthroughtheindependentBarStandardsBoard.

Forsolicitors,thetypicalroutetoqualificationiseitheralawdegree,oranotherdegreeplusalawconversioncourse,followedbyaperiodofwork-basedlearningthroughatrainingcontract.TheSRAaccreditsinstitutionstoprovidelawdegreesandconversioncourses.

97

Profession Regulatorybodies Professionalbodiesandothersignificantbodies

Routetoqualification

Accountancy TheFinancialReportingCouncil(FRC)isresponsibleforregulatoryoversightoftheaccountingprofessionintheUK.TheFinancialConductAuthority(FCA)istheconductregulatoroffinancialservicesfirms.TheICAEWalsoregulatesitsmembers.

TheInstituteofCharteredAccountantsinEnglandandWales(ICAEW)isthelargestUK-basedaccountancyprofessionalbody(over140,000membersworldwide).OtherprofessionalbodiesaretheInstituteofCharteredAccountantsinScotland(ICAS),theAssociationofCharteredCertifiedAccountants(ACCA),theCharteredInstituteofPublicFinanceandAccountancy(CIPFA)andtheCharteredInstituteofManagementAccountants(CIMA).TheConsultativeCommitteeofAccountancyBodies(CCAB)isanumbrellaorganisationforthemajoraccountancybodiesintheUKandIreland.

TheICAEWwebsitelistsfiveseparateroutestobecomingaCharteredAccountant.Someoftheseinvolveadegree,whetherinaccountancyorsomeothersubject,whileothersinvolvenodegree.Inallroutesthereisasignificantperiodofon-the-jobtraining.

Engineering TheEngineeringCouncil(ECUK)

Thereare36differentprofessionalbodiesforengineeringintheUK.TheECUKsetsoverallstandardsforcompetenceandethicsacrosstheprofession.TheRoyalAcademyofEngineering(RAEng)isathoughtleadershiporganisation.

Itispossibletobecomeanengineeratdifferentlevels,e.g.NVQLevel3(technicianlevel),BEng,MEng(Charteredlevel).Engineerscanthenclimbtheladderbytakingfurtherqualifications.Engineeringdegreesaretypicallyaccreditedbyprofessionalbodies,andmosttopuniversitiesareaccredited,butthereisnorequirementtotakeanaccrediteddegree.TheECUKoverseesrequirementsforentrytotheprofessionatdifferentlevelsthrough‘UK-SPEC’.Thisincludesrequirementsinethicsandprofessionalism.

98

Profession Regulatorybodies Professionalbodiesandothersignificantbodies

Routetoqualification

Actuarialscience TheInstituteandFacultyofActuaries(IFoA)istheregulator,subjecttoindependentoversightbytheFinancialReportingCouncil(FRC).

TheInstituteandFacultyofActuaries(IFoA) Averygoodfirstdegreeinmaths(andoftenhighermaths),followedbyprofessionalexaminationsoverseenbytheIFoAandtypicallydonewhileemployedasastudentactuary.Qualificationtofellowshipleveltypicallytakessevenyearsandcantakemuchlonger.TheIFoAhasrecentlyintroducedanalternative‘technicianstyle’qualificationofCertifiedActuarialAnalyst(similartotheparallelqualificationinthelegalfield).

Intellectualpropertylaw TheIntellectualPropertyRegulationBoard(IPReg)

TheCharteredInstituteofPatentAttorneys(CIPA)andtheInstituteofTrademarkAttorneys(ITMA)

PatentAttorneys(whoseworkrequiresknowledgeofatechnicalspecialismaswellaslegalexpertise)takeaSTEM(Science,Technology,EngineeringorMaths)degreewhereasTrademarkAttorneyscantakeanyfirstdegree.BothkindsofIntellectualPropertyAttorneywillthentakeafurtherqualification,typicallywhileinwork,fromanaccreditedinstitution,inordertoqualifytopracticeasanIntellectualPropertyAttorney.

99

5.4.2 Table4:Otherprofessions–ContinuingprofessionaldevelopmentandoverseeingethicalstandardsProfession Continuingprofessionaldevelopment Overseeingethicalstandards

Medicine FollowingtheintroductionoftheGMC’snewrevalidationsystem,doctorshavetodemonstratethattheyareup-to-datetoaresponsibleofficer–oftenthemedicaldirector–intheirorganisation.TheorganisationthenhastomakerecommendationtotheGMCaboutwhetherthedoctorshouldhavetheirlicenserenewed

IndividualmedicalprofessionalsarerequiredtoregisterwiththeGMCinordertopractise.TheGMCoverseesacodeofethics(‘goodmedicalpractice’),handlescomplaintsfromthepublicorotherprofessionals,investigatescasesandthenmakesjudgmentsthroughtheMedicalPractitionersTribunalService.Arangeofsanctionscanbeapplieduptoandincludingremovingprofessionalsfromtheregister,whichremovestheirlicensetopractice.TheGMC’scodeincludesadutytoreportonothers.

Law ThereusedtobecompulsoryenforcementofmandatoryCPDhoursbytheregulator,buttheprofessionisnowmovingmoretowardsamodelwhereLawyersareexpectedtokeeptheirknowledgeandskillsuptodateandtodemonstratethattheyhavedonethis,butthereisnomandatoryminimumnumberofhours.

AllsolicitorsareboundbytheSRAHandbookwhichincludesasetofprinciplesandacodeofconduct.TheSRAhandlescomplaintsandinvestigatescases.CasesareheardbytheSolicitorsDisciplinaryTribunal.TheSRAregulateslegalpracticesaswellasindividuallawyers,andcanremovealicensetopracticefromeither.TheSRAcodeincludesadutytoreportonothers.

Accountancy TheICAEWdoesnotsetminimumCPDrequirementsinhours.However,itasksthatmembersreflectontheirlearningdevelopmentneeds,identifyandcarryoutappropriateCPD,andthenreflectontheimpactofthatCPDafterthefact.Theymustalsokeeparecordofthisprocess.Everyyear,arandomsampleofrecordsisassessed.

TheICAEWhasacodeofethics.Ithandlescomplaints,investigatescasesandcarriesoutpublichearingsthroughtheDisciplinaryandAppealCommittees.TheCommitteehasarangeofsanctionsavailabletoit,includingreprimandsandfines.TheCommitteecanremoveamember’spractisingcertificatewhichbarsthemfromperformingcertainroles,e.g.auditor.Itcanalsoexcludeamemberandbanthemfromapplyingforreadmissionforafixedperiod.

100

Profession Continuingprofessionaldevelopment Overseeingethicalstandards

Engineering TheECUKhasjustintroducedarequirementforCPD(20hours)whichwillcomeinfrom2017,andwillbeoverseenbyprofessionalbodies.ProfessionalbodieswillberequiredtomonitorandenforceCPDcompletion.Previouslyitwasencouragedbutnotcompulsory,anddifferentprofessionalbodieshaddifferentapproaches.

TheECUKandRAEnghavejointlypublishedahighlevelStatementofEthicalPrinciples.Engineersareboundtoabidebythisandtheindividualcodesoftheirinstitution(e.g.theIET’sRulesofProfessionalConduct).TheIETinvestigatescomplaintsandhasadisciplinarycommittee,whichhasthepowertotakeawaymembershipandprofessionalregistration.ThisisnotalicensetopractisebutitsremovaldoespreventengineersfromusingthetermCharteredEngineer,andinpracticetheeffectontheengineer’scareerisserious.

Actuarialscience TheIFoAissuespractisingcertificatesforreservedroles.CPDismandatoryforallmembersbutthosewhoneedapractisingcertificatehavethemoststringentrequirements(30hours,ofwhich20hoursmustbeobtainedat‘externalevents’).EmployingorganisationsgenerallyhaveanamedCPDcoordinator.MembersalsohavearequirementtoundertakeethicsCPDonanannualbasis.

TheIFoAregulatesmembersthroughtheActuariesCode,TechnicalActuarialStandards,andActuarialProfessionStandards.Italsoproducesalargerangeofnon-mandatoryethicalguidanceforitsmembers.Ithandlescomplaints,investigatescasesandcarriesoutdisciplinaryhearings.Memberscanbereprimanded,fined,suspendedorexcluded.Lossofapractisingcertificatepreventsactuariesfromoccupyingreservedroles,andexclusionfromtheprofessionalbodyhassevereconsequencesforone’scareer.

Intellectualpropertylaw CPDisaregulatoryrequirement,setbyIPReg.Allregisteredpatentandtrademarkattorneysinactivepracticearerequiredtoachieveaminimumof16hoursCPDinordertoremainregisteredandtoself-certifythattheyhavemetthisrequirementwhenrenewingtheirregistration.Compliancemaybemonitoredbyrequiringdetailedsupport(suchasindividualCPDrecords)fromarandomsampleofregistrantseachyear.

IPReghasacodeofconduct,handlescomplaints,investigatescasesadcarriesoutdisciplinaryhearings.Sanctionsincludepublicwarning,suspensionfrompractice,exclusionfrompractice,requirementtoundertaketraining,fines.

101

5.4.3 Table5:Otherprofessions–Advice,guidanceandthoughtleadershipProfession Adviceandguidance Thoughtleadership

Medicine TheGMCoffersadviceonethicsandstandardsbytelephoneoremail.Italsooffersextensiveguidanceonethicalissuesthroughitswebsite,e.g.confidentiality,patients’bestinterests,consent.TheBMAalsoissuesguidanceincludingan‘ethicaltoolkit’.

Asarepresentativebody,theBMAactsasaforumfordiscussionandseekstospeakonbehalfoftheprofession.

Law TheLawSocietyhasapracticeadviceservice.ThedivisionofresponsibilitybetweenbodiesisthattheSRA‘tellspeoplewhattherulesare’,andhasahelplinethroughwhichitprovidesadviceoninterpretationoftherules,whereastheLawSocietygivesadviceoverandaboverules,i.e.guidanceandsupportaroundprofessionalethics.Inthejargon,theSRAgives‘practicenotes’,whereastheLawSocietygives‘guidancenotes’.TheLawSocietyprovidessupportandadviceoninterpretation,management,andbestpracticeinrelationtoethicalvalues,professionalprinciplesandstandards.Italsohasasuiteofinteractiveethicstrainingavailablethroughitswebsite.

TheLawSocietycarriesoutpublicengagementaroundspecificissueswhichareofinteresttothepublic.

Accountancy TheICAEWprovidesinteractiveonlineresourcesbasedaroundethicaldilemmas,andguidanceonkeyconceptsincludingintegrityandthepublicinterest.

TheICAEWcarriesoutextensivethoughtleadershipactivitiesinanumberofareas.Itaimsto‘shapegovernmentthinkingonregulatorypolicyandlookaheadatlong-termissuesfortheprofession’.

Engineering TheIETuseanonlinecommunityforelectricianstoaccessadvice.Theydonothaveahelpline,buttheyprovideonlineresourcesincludingresourcesonprofessionalethics.

TheIEThasathoughtleadershiprole,forexamplepublishingreportsonissuesofinteresttoitsmembers.TheECUKandRAEnghavethechallengingroleoftryingtobringtogether36professionalbodiesandtocreateacoherentvoiceonbehalfoftheprofession.TheECUKhasaboardforthispurposeonwhichall36bodiesarerepresented.

102

Profession Adviceandguidance Thoughtleadership

Actuarialscience TheIFoAprovideadviceandguidanceinanumberofareasbyemailandphone.Forexample,theProfessionalSupportServicecanadviseon‘interpretingprofessionalortechnicalguidance’.Theyalsousevolunteerstoadviseoninterpretationofregulation.Italsoproducesarangeofvideo/onlinee-learningmaterialsinethicsavailableforfreetomembers.

TheIFoAseespublicengagementasakeypartofitsrole,raisingtheprofileofwhatisarelativelypoorlyunderstoodprofession.Italsocarriesoutresearchtoinformbestpracticeinactuarialscience.

Intellectualpropertylaw IPReggivesguidanceonissuesbutdoesnotprovideadvice.Itisnotclearwhethertheprofessionalbodiesprovideanadviceserviceformembers.

Theprofessionalbodiescarryoutanumberofthoughtleadershipactivities,speakingonbehalfoftheprofessiontotheregulatorandgovernmentandseekingtopromotetheprofession.

103

6 BibliographyArmstrong,A.(2012,July).RestoringTrustinBanking.NationalInstituteEconomicReview,221,R4-

R10.

Austin,H.(2009,August9).TheWarringTribesofProfessionalism.FinancialAdviser.

Bain,I.(2013,August15).Bankingstaffneedtoimproveprofessionalism:ifs.FinancialAdviser.

Banyard,P.(2006,June).Bankingethics:Somesurprisesalongtheway.CreditManagement,pp.22-23.

Benson,Lord.(1992).TheProfessions.HansardHLDeb08July1992vol.538cc.1198-234.

Calhoun,C(1995).‘StandingforSomething’.JournalofPhilosophyXCII.

Doodson,R.(2016).MADissertationsubmittedfortheMAinAppliedandProfessionalEthics,UniversityofLeeds.

FinancialConductAuthority.(2015,October).Sourcebook:ProfessionalFirms.FinancialConductAuthority.

FinancialConductAuthority.(2015,October).Sourcebook:TrainingandCompetence.FinancialConductAuthority.

Gapper,J.(2014,February12).Thereisnosuchthingasthebankingprofession.FinancialTimes.

Girard,S.(2012,October25).Professionalisminbanksmustbeparamount:Cass.FinancialAdviser.

Graafland,J.J.,&vandeVen,B.(2011).TheCreditCrisisandtheMoralResponsibilityofProfessionalsinFinance.JournalofBusinessEthics,605-619.

Hambley,G.(2009,March).ProfessionalismisKey.CharteredAccountantsJournal,pp.66-67.

Hambly,G.(2009,March).ProfessionalismisKey.CharteredAccountantsJournal,pp.66-67.

HMTreasury;BankofEngland;FinancialConductAuthority.(2015).FairandEffectiveMarketsReview:FinalReport.

Hopkins,M.S.(2010).BadBanking.GoodEthics.Discuss.MITSloanManagementReview,51(2),96.

InstituteofCharteredAccountantsinEnglandandWales(2014).ICAEWresponsetoBankingStandardsReviewconsultationpaperpublishedinFebruary2014.

InternationalAcademyofRetailBanking(2014).SubmissionontheUKBankingStandardsReview.

Kelly,D.C.(2012,September/October).DishonestyandDysfunction:TheCFAInstituteCodeandStandardsandtheLiborScandal.CFAInstituteMagazine,pp.60-61.

Lafferty,M.(2014,February20).Wearefosteringanethics-basedcultureinretailbanking.FinancialTimes.

Lambert,R.(2014).BankingStandardsReview.

MacIntyre,A.(1981).AfterVirtue:AStudyinMoralTheory.NotreDame,IN:NotreDameUniversityPress.

104

Mawer,P.(2010).Speechmadeat'Publictrustintheprofessions:ethics,trustandintegrity',on-dayconference,25February2010.

Megone,C.(2009).Integrity,VirtueandtheFinancialCrisis.Exeter:ImprintAcademic.

ParliamentaryCommissiononBankingStandards.(2013).ChangingBankingforGood.London:TheStationeryOfficeLtd.

Paulet,E.(2011).BankingEthics.CorporateGovernance,11(3),293-300.

Simoney,G.(2012,October25).Professionalisminbanksmustbeparamount:Cass.FinancialAdviser.

Spicer,A.,Gond,J.,Patel,K.,Lindley,D.,Fleming,P.,Mosonyi,S.,...Parker,S.(2014).AReportontheCultureofBritishRetailBanking.London:NewCityAgendaandCassBusinessSchool(CityUniversityLondon).

Tenbrunsel,A.,&Thomas,J.(2015).TheStreet,theBullandtheCrisis:AsurveyoftheUSandUKfinancialservicesindustry.NotreDame,IN:UniversityofNotreDame.

vandeVen,B.(2011).BankingAftertheCrisis:TowardsanUnderstandingofBankingasaProfessionalPractice.EthicalPerspectives,18(4),541-568.

Wallace,T.(2015,November27).BankingEthicsBodyWinsOverSceptics.CityA.M.

Watkins,J.P.(2011).BankingEthicsandtheGoldmanRule.JournalofEconomicIssues,XLV(2),363-371.

Wehinger,G.(2012).Bankinginachallengingenvironment:Businessmodels,ethicsandapproachestowardsrisks.FinancialMarketTrends,2012/2,79-88.

Wehinger,G.(2013,Q1).Banking,ethicsandgoodprinciples.OECDObserver,pp.14-15.

105

AppendixA:Methodology

A.1 GeneralapproachTheresearchcomprisedthreestages:

• Aninitialdeskresearchstage,tofindoutwhatrelevantmaterialalreadyexistsandtosetoutabackgroundagainstourresearchwouldtakeplace;

• Anonlinesurveystage,toidentifybroadtrendsandtobegintoanswertheresearchquestions;

• Asetofinterviewstoinvestigatetheresearchquestionsingreaterdetailandtosupportandexplainthebroadtrendsdiscoveredthroughthesurveys.

Theresearchquestions,whichguidedthedevelopmentandanalysisofallthreestages,wereasfollows:

1. Howdobanksandbuildingsocietiesviewthecurrentroleofprofessions(ofallsorts)inthesectorinaddressingissuesofethicsandculture?22

1a.Inparticulardofirmsseeaddedvalueinaprofessionalbodythatseesitsroleasgoingbeyondtheprovisionofqualifications?

2. Howeffectiveareprofessions,totheextenttheyarerepresented,incontributingpositivelytotheethicsandcultureofbanksandbuildingsocieties?

2a.Towhatextentareexistingbankingprofessionalbodiesadapting(their‘businessmodel’)tomeetthedemand(asidentifiedinquestion2),andtheimpactofregulatorychangesinthesector?

3. Inwhatdifferentways(bothwithinbankingandmoregenerally)areexistingprofessionsorganisedsoastoaddressethicsandculture(the‘businessmodel’oftheprofessions)?Forexample;

a. Dotheyregulatetheirmembers,orsimplyadvise/provideservicestothem?

b. Whatfocusdotheyhaveontheroleofethicsinprofessionallife–dotheyjusthaveacodeordotheyprovidesupportandtraining–designedtotransformsuchacodefromamerepieceofpaperintoalivingdocument?

c. Howeffectiveistheirtraininginprofessionalismasawhole?Dotheyrequirememberstodocontinuingprofessionaldevelopment?WhatistheemphasisonethicsandintegritywithinanyCPD,requiredorotherwise,ascomparedwithupdatingtechnicalskills,forexample?

d. Howeffectivearetheprofessionalbodiesindevelopingmembers’ethicsandthuscontributingtotheethicsandcultureoforganisations?

22Referencesaremadeinthisdocumentto‘ethicsandculture’becauseitisassumedherethatthereisanintimateconnectionbetweenethicalbehaviourandthecultureofanorganisation.Theethical(orunethical)behaviourofanorganisationcontributestothedevelopmentofthefirm’scultureandthefirm’scultureimpactsontheirbehaviour(theirabilitytobehaveethically).PlatoandAristotlebothprovideinsightintothisconnection.

106

Tohelpwithsampling,workingwiththeBSB,weidentifiedaninitiallistofprofessionalbodieswhosemembershipissignificantlyrepresentedinthebankingsector:the‘banking-relatedprofessionalbodies’asdefinedinsection2.5above.ThislistoforganisationswasinformedbydiscussionswiththeBSB,theirdiscussionswithrelevantorganisationsandbyattentiontothosebodiesincludedinthefollowingreport:Patel,K.(2014).Settingstandards:Professionalbodiesandthefinancialservicessector.London:CentrefortheStudyofFinancialInnovation.Thisresultedinaninitiallistof19professionalbodies.

Onconductingtheresearchsetoutinthisreporttwofurtherorganisations,whoprovideasubstantialnumberofprofessionalqualificationstothebankingsector,wereidentifiedasbeingrelevanttoconsideraspartofthislistofprofessionalbodies.TheseweretheRetailBankingAcademyandifsUniversityCollege.Representativesfrombothoftheseorganisationswereinterviewedaspartofthisresearch(initiallyasanotherfinancialservicesstakeholder)andtheirviewshavebeenusedtoinformthefindings.Theinitiallistof19professionalbodiesalsoincludedfiveaccountancybodiesandoneprofessionalbodyinlaw.Onfurtherreflectionitwasdecidedtoincludelawandaccountancyastwoofthecomparatorprofessions.Thisresultsinadifferenttotalnumberofbanking-relatedprofessionalbodiesdependingonhowthedataisviewed.Astheresearchinterviewswereconductedwhenwehadthisinitiallistof19,therearequotesthatreferencethenumberof‘professionalbodiesinbanking’as19.Forthepurposesoftables1to5includedinthisreport,theorganisationslistedbelowwereplacedinthefollowingcategories:

Banking-relatedprofessionalbodies:

• AssociationofCorporateTreasurers(ACT)

• CharteredBankerInstitute(CharteredInstituteofBankersinScotland)

• CharteredFinancialAnalystSocietyoftheUK/CFAInstitute

• CharteredInstituteofCreditManagement(ICM)

• CharteredInsuranceInstitute(CII)[includingtheaffiliatedPersonalFinanceSociety(PFS)]

• CharteredInstituteofInternalAuditors(CharteredIIA)

• CharteredInstituteforSecurities&Investment(CISI)

• CharteredInstituteofTaxation(CIOT)

• GlobalAssociationofRiskProfessionals(GARP)

• ifsUniversityCollege• InternationalComplianceAssociation(ICA)

• InstituteofProfessionalFinancialManagers(IPFM)

• InstituteofRiskManagement(IRM)

• InvestorRelationsSociety(IRSociety)

• RetailBankingAcademy(RBA)

Comparatorprofessionalbodies(andrelatedorganisations):

• AssociationofCharteredCertifiedAccountants(ACCA)

• AssociationofInternationalAccountants(AIA)

• CharteredInstituteofManagementAccountants(CIMA)

• GeneralMedicalCouncil(GMA)

• InstituteofCharteredAccountantsinEnglandandWales(ICAEW)

107

• InstituteofCharteredAccountantsofScotland(ICAS)

• InstitutionofEngineeringandTechnology(IET)

• InstituteandFacultyofActuaries(IFoA)

• IntellectualPropertyRegulationBoard(IPReg)

• RoyalAcademyofEngineering(RAEng)

• TheLawSocietyofEnglandandWales

A.2 DeskresearchWereviewedawiderangeofdocuments.Inthissectionwedescribehowwesetaboutidentifyingresearchmaterialsandreviewingthem.

A.2.1 MaterialssuppliedbytheBankingStandardsBoard

ThefollowingmaterialswereidentifiedasimportantdocumentsbytheBankingStandardsBoardandwerereviewed:

ChangingBankingforGood:ReportoftheParliamentaryCommissiononBankingStandards(particularlyChapters2,6and7).

Lambert,Richard:BankingStandardsReview(2014)

FinancialConductAuthoritysourcebook:ProfessionalFirms(2015)

FinancialConductAuthoritysourcebook:TrainingandCompetence(2015)

FinancialConductAuthorityunitsyllabus:FinancialServices,RegulationandEthics(2015)

FairandEffectiveMarketsReview:FinalReport(2015)

WealsoreviewedasampleoftheresponsesfromboththeindustryandotherinterestedbodiesandindividualsaspartoftheconsultationontheLambertreport.Inordertogetabroadlyrepresentativesamplewhilekeepingtheresearchatamanageablescale,wereviewedthefollowing:

Atleastonesubmissionfromeachcategoryofbankorbuildingsocietythatwasconsulted23andproportionallymorewheneithertherewereahighnumberoforganisationsinthecategoryortheorganisationswereverylargeemployers.

Allofthesubmissionsfromprofessionalbodiesorothersimilarorganisations,sincethefocusoftheresearchisonprofessionalismandprofessionalisation.

Submissionsfromafewotherkeystakeholderswhoseperspectivewethoughtwouldbeparticularlyimportant,e.g.regulators.

Thecompletesampleisasfollows:• AssociationofBritishInsurers

• AssociationofCorporateTreasurers

• AssociationofForeignBanks

• BritishBankersAssociation

• BuildingSocietyAssociation

23Thecategorieswere:branch,buildingsociety,challengerbank,investmentbank,largeUKbank,privatebank,smallUKbank,universalbank.

108

• CFAInstitute

• CharteredBankerInstitute

• CharteredBankerProfessionalStandardsBoard

• CharteredInstituteforSecuritiesandInvestment

• CharteredInstituteofInternalAuditors

• CharteredInstituteofManagementAccountants

• CharteredInsuranceInstitute

• FCAPractitionerPanel

• FRC

• ICAEW

• InstituteofBusinessEthics

• Instituteandfacultyofactuaries

• InstituteofCustomerService

• InternationalAcademyofRetailBanking

• JamesDempsey

Weusedarudimentaryanalysisframeworkinordertomakesenseofthesesubmissionsandtodrawgeneralconclusions.Ineachcasewewerelookingforevidenceof:

• Theauthor’sassessmentofthestateofprofessionalisminthebankingsectorcurrently;and

• Theirassessmentoftheappetiteorscopeforgreaterprofessionalisationofthesector.

WealsohadaccesstotheresponsestotheParliamentaryCommissionreport,towhichwereferredonlywhentheywerequotedinthemainreportinawaywhichsuggestedthewholecontributionwouldbeofparticularinterest.TherationalefornotsamplingtheseinasystematicwayaswithresponsestotheLambertreportwasthata)thelimitedtimeavailabletoustocarryouttheresearchmeantwewouldbeunabletoreadasubstantialsampleofresponsestobothreports,andb)theLambertreportbuildsontherecommendationsofthePCBSreportandismorecloselyfocusedontheareasofinteresttoourresearch,soitwasthoughtthatresponsestoLambertweremorelikelytobeofinterestinthecontextoftheresearch.

A.2.2 Publishedmaterialsfromprofessionalbodies

Whiletherewasnottimetocarryoutathoroughreviewofrelevantmaterialspublishedbyallofthebodiesinourinitiallist,wewereabletoestablishanoverviewoftheirpositionsbysurveyingarangeoftheirwebsitesandpublishedmaterials,andtherebytogainanoverallimpressionofthestateofplayregardinginterventionsandstructuresaimedatdrivingupthelevelofprofessionalism,includingethicalbehaviour,inthebankingorotherrelevantsectors.

A.2.3 Documentsfromsearches

Finally,wecarriedoutanumberofsearchesusingacademicdatabases24toidentifyarangeofmaterialsfromothersources.Weusedabasicinformationretrievalmethodologytosearchthedatabases:1.Createaquerybasedonathemeofinteresttotheresearch,e.g.‘ethics’.2.Createfurtherqueriesusingtermscloselyrelatedtothesametheme,e.g.‘morality’,‘goodbehaviour’.3.Combinethesequeriesintoasinglequeryusingthe‘OR’operator.4.Repeatsteps1-3forotherthemesofinterest.Thethemesweusedwere‘ethics’,‘culture’,‘professionalism’and‘banking’.5.

24ABIComplete,BusinessSourcePremier,Philosopher’sIndex.

109

Combinethecompositequeriesusingthe‘AND’operatortofindresourcesrelatingtorelationshipsbetweenthemes.Wewereparticularlyinterestedinresourcesthatreferredtoboth‘banking’andanyofourotherthreethemes.6.Readthroughtheabstractsofresourcesthusdiscoveredandremovethosethatappearunrelatedtotheresearch.

Finally,weconductedanumberofsearchesusingGoogleandGoogleScholarusingsimilarsearchterms.

Thematerialsthusdiscoveredincluded:• Newsarticles

• Articlesintradejournals

• Academicpapers

• Industryreports

Thesesourcesprovidedusefulbackgroundtothedemandforincreasedprofessionalisationofthebankingsector.Wewerealsolookingforanyevidenceoftheeffectofprofessionalisationonethicsandculture.AswiththeresponsestotheLambertreport,weusedarudimentaryanalysisframeworktomakesenseofthesedocuments.

A.3 OnlinesurveyWecreatedtwoseparatesurveys:oneaimedatprofessionalbodiesandanotheratbanksandbuildingsocieties.Bothsurveysweresetupandadministratedusinganonlinehostingservice,LimeService.AnalysiswascarriedoutusingMicrosoftExcelastherelativesimplicityoftheanalysisdidnotwarrantmorecomplexorpowerfulsoftware.

Thenumbersofresponsesreceivedwereasfollows:

Banksandbuildingsocietiessurvey:11completeand9incomplete.

Professionalbodiessurvey:12completeand7incomplete.

Theincompleteresponseswereremovedpriortoanalysis.

Theoverallsamplesizeinbothsurveyswasthereforequitesmall.Becauseofthistheresultsshouldbereadasindicativeonly.Thiswasalwaystheintentionwiththiselementoftheresearchandtherearesomemitigatingfactors,namely:

1. Theindividualssurveyedwerechosenduetotheirbeinginapositionwheretheyarelikelytobehighlywell-informedabouttheissuesexploredinthesurvey,andthereforetheirresponsescanbegivenconsiderablymoreweightthanifthesurveyhadsimplygonetorandomlychosenindividualswithinthetargetorganisations.

2. Inmostifnotallareasthereisdatafromtheinterviewscoveringsimilarareas.Wewillthereforebeabletocomparethesurveyresultstoseewhethertheyareinlinewiththeinterviewresults.

Intheoriginalsurveys,weaskedparticipantsaboutfourseparateservicetypesinbanking:retailorconsumer,corporateorcommercial,investmentandprivate.However,duetotheverysmallsampleineachsub-categoryofbankingservicetype,wedecidednottocarryoutdisaggregateanalysistopresentfindingsbyservicetype.Thefindingsinthisdocumentarethereforebasedonamalgamateddataforthetotalsample.

110

A.4 InterviewsWeconducted53interviewsintotal,splitintofourcategories:banksandbuildingsocieties,banking-relatedprofessionalbodies(i.e.professionalbodieswithasignificantproportionoftheirmembershipworkinginthebankingsector),non-banking-relatedprofessionalbodiesandotherfinancialservicesstakeholders(e.g.regulatorybodies,tradeassociations,educationproviders).

Duetotheregionaldiversityofinterviewees,theinterviewswereconductedfacetofaceorbyphoneoveraperiodofonemonth(FebruarytoMarch2016).Theinterviewsweresemi-structuredandconsistedofafixednumberofquestionswhichwereansweredbyintervieweesinalltheinterviews,withanumberofpromptstoelicitfurtherdetailaroundeachmainquestion.Adifferentscriptwasdevelopedforeachcategoryofinterview.Somequestionswerecommontodifferentcategoriesinordertoallowforcomparisonsbetweengroups.

Inthebanksandbuildingsocietiescategory,weconducted22interviewswithrepresentativesof15firms(sectortotalis184firms).Fourofthefirmsinterviewedwerebuildingsocieties(outof44buildingsocieties)andelevenwerebanks(outof140banks),soafairlyproportionatedistribution.Inonelargerfirmtheconductofmultipleinterviewsallowedabroaderperspectiveontheorganisation.Mostinterviewswerewithoneseniormemberofthefirm.Inthreecasestwofirmmemberswereinterviewedtogether(attherequestofthefirms).Allinterviewswereconductedbythesameinterviewer.

Theprofileofthefirmsinterviewedcoveredtherangeofthesectorwell:fromsmallregionalfirmstolargerglobalfirms;fromfirmscoveringmultiplebanking/buildingsocietyactivitiestofirmsspecialisinginnichebankingroles;fromretailbankingtowholesale/investmentbanking;fromfirmswithtens/hundredsofemployeestofirmswithmultiplethousandsofemployees;fromfirmswiththousandsofcustomerstofirmswithmillionsofcustomers;andfromfirmswithmillionsofpoundsofassetstofirmswithbillionsofpoundsofassets.

Inthebanking-relatedprofessionalbodiescategory,weconducted16interviewswithrepresentativesof13bodies(sectortotalis19bodies–soverygoodcoverageofthesector).Twobodiessubmittedmorethanoneintervieweeinordertoensurethatkeyareasofexpertiseandknowledgewererepresented.

Inthenon-banking-relatedprofessionalbodiescategory,weconductedsixinterviewswithfivedifferentbodies.Inthiscategorytheaimwastoprovidecasestudiesforcomparisonwiththebankingsectorratherthantogainarepresentativeperspective,socoverageoftheprofessionalbodysectoroverallisnotrelevant.Bodieswerechosenforkeysimilaritiesorinterestingpointsofcomparisonwiththebankingsector,eitherinthetypeofworkinvolved,orinregulatorystructureetc.

Intheotherfinancialservicesstakeholderscategory,weconductednineinterviewswithfiveorganisations.

Theinterviews(inallcategories)wererecordedontworecorders(toallowforanytechnicalfailure),thendownloadedtoasecuredriveandtranscribedintoanonymisedfiles(thoughtheinterviewcontentobviouslycontainsidentifyinginformationiftakenasawhole).Eachinterviewwasthencodedbytwocoders,usingpre-preparedcoding-nodes(andNVivosoftware),althoughthecodingprocessallowedcoderstoaddadditionalnodesasthemesemergedfromthecontent.Aftercodingwascompletedtherewasa‘sense-makingsession’attendedbyallthreeofthecodersforallthesetsofinterviews.Finallytheresultswerewrittenupwithfurtherreferencetothenodes.

111

CONTACTBankingStandardsBoard3rdFloor,75KingWilliamStreet,LondonEC4N7BEwww.bankingstandardsboard.org.ukTelephone:+442034409765Email:[email protected]@BSB_UK

Date post:	21-Apr-2018
Category:	Documents
Upload:	trinhtu
View:	221 times
Download:	4 times