TWO NEW SURVEYS by the Irish Banking Culture Board (IBCB) suggest that while public trust in the Irish banking sector remains low, bank staff members believe industry cultures are improving.
The IBCB is an industry initiative funded by the five main retail banks — Bank of Ireland, AIB, Permanent TSB, Ulster Bank and KBC Bank — which aims to improve banking culture in Ireland.
Of over 1,000 members of the public surveyed as part of the IBCB’s éist Public Trust in Banking survey, a plurality of respondents (46%) said they had low levels of trust in the banking sector.
Just 19% of those surveyed by the Board said they had a high level of trust while 43% said their perception of banking had worsened since the 2008 financial crisis.
Trust levels have improved substantially among younger customers since the crash, however.
Some 32% of 18-to 34-year olds said their view of the banking industry improved over the last decade compared with just 18% of those aged over 45.
The IBCB said, “Clearly many of those who lived through the 2008 recession will be slow to reinvest their trust in banks but younger people are clearly open to doing just that.”
The pandemic has also had an impact on the trust scores generally, according to the report.
While over half of respondents said that banks had maintained a good level of customer service during the Covid-19 crisis, just 31% believe banks have supported the most vulnerable.
Only 38% of those surveyed said the banking sector had acted fairly or showed a commitment to society during the pandemic after months of negative press.
In March, NatWest Group announced plans to wind down Ulster Bank operations in the Republic of Ireland. KBC Bank announced last month that it also plans to exit the Irish market in the coming years.
Also in March, Bank of Ireland announced plans to shutter 88 branches across the island.
“Given recent announcements regarding the composition and structure of the banking industry, the imposition of significant regulatory sanctions, the vagaries of the national mood and the prevailing social and economic headwinds that all of society has faced during the pandemic, it would be surprising if perceptions of banks had improved materially,” the report states.
“Notwithstanding this, the findings are stark – if not surprising.
“The outcome of this survey indicates that there is an ongoing resistance to the idea that banks can be, and are, a positive force in society. Despite significant progress made across the industry, it will take time to alter this mindset in a meaningful way.”
Commenting on the report, Minister for Finance Paschal Donohoe said there is a “lingering resentment towards the banking sector among older generations”.
Digitalisation and branch closures in rural areas are “resulting in the sector losing its human face”, he added.
“Many respondents felt the sector does not have customers’ best interests at heart.
“It would seem that this low trust is driven more by underlying suspicion than it is on personal experience. This shows how much work needs lies ahead in dealing with perception and reputation.”
Bank culture
Meanwhile, substantial progress has been made on improving bank culture in recent years, according to a separate ICBC survey of bank staff.
Nearly 10,650 bank employees responded to the survey, roughly half the total staff of the IBCB’s five member banks.
Three in five respondents (58%) said their organisation’s commitment to building a ‘speaking up’ culture has improved since 2018.
“As a result, more people who have felt the need to raise a concern in the past 12 months did so, and more felt that their concerns were taken seriously,” the report states.
Some 85% of staff members surveyed said their colleagues conduct their business ethically.
But Covid-19 and remote working have put bank employees under strain over the past year, according to the report.
Over half (53%) of bank staff members reported that they have felt under constant strain at work in the past six months, 10 percentage points above the global norm.
“Similarly, only 65% feel they can integrate their personal and work life in a way that works for them,” the report suggests.
Donohoe said he “hopes” to publish the heads of bill for a new Senior Executive Accountability Regime in July (SEAR).
SEAR would allow the Central Bank to pursue individuals working in regulated companies and hold them accountable for wrongdoing.
“The overall message seems to be that while there is progress being made, and that progress needs to be recognised, individual institutions have to improve their own culture further. This is crucial to building trust among customers and staff,” the Dublin Central TD said.
“However, such changes need reinforcement by appropriate legal changes. A change in culture, while essential, is not a substitute for effective regulation, supervision and enforcement. Legal changes and cultural change have to work together.”
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