Martin Day, Managing Director, Corporate & Professional Qualifications, The London Institute of Banking & Finance
In 2013, the long-awaited report, Changing Banking for Good, was published by the Parliamentary Commission on Banking Standards to much comment, not least among the media, about the role the industry played in its near-downfall in the collapse of 2008/9.
The report was wide-ranging and included evidence from a vast array of stakeholders including banks, financial services providers, professional bodies, industry commentators and policymakers. Agreeing a general consensus with such a variety of opinions proved challenging, but the need to improve professional standards was among one of the key recommendations that all participants could broadly agree.
But what do we mean when we talk of ‘professional standards’, particularly in the banking sector? The introductory page to the report itself observes that it is “open to debate” whether banking is indeed a profession, but it does acknowledge that bankers should act ‘professionally’ at all times. As one of the leading professional bodies operating in the industry with routes stretching back to 1879, at The London Institute of Banking & Finance we believe we have a unique voice in the debate.
On this subject, we were pleased earlier this year to invite Dame Colette Bowe, Chair of the Banking Standards Board to address our membership community on this very matter. Here, Dame Colette offered our delegates an interesting analogy into the complex relationship between ethics and law, highlighting that whilst there is no law requiring us to help someone in need across the street, it is something that most of us would do. What in essence Dame Colette was saying is that there is a truth inherent to every individual in every industry when faced with a conundrum; most people will opt to do the right thing, without there being any legal compulsion. The challenge however is when “doing the right thing” is not immediately clear; when conflicting pressures or differing demands obscure the correct way to proceed, or when there are different options on the right path to take.
How then can professional industries, be they medical, legal, banking or any other, foster a culture which supports their practitioners to ‘do the right thing’ and act instinctively in doing so? How can they develop and provide the tools to equip their members with the skills and knowledge to act in the best interests of colleagues and customers?
For The London Institute of Banking & Finance, it is ‘professionalism’ that provides the link between ethics and law. Professionalism, we believe, helps overcome this uncertainty, providing practitioners with the skills and experience to analyse each situation and to behave both ethically and legally at all times.
The achievement of this ‘professionalism’ is essentially linked to an on-going commitment to personal development. Affording staff the opportunity to acquire professional knowledge and skills, and ensuring these are consistently kept up-to-date within a robust framework, establishes a culture that makes unethical decision-making, irresponsible risk-taking and trust-damaging customer treatment completely unacceptable. While our experience lies primarily in the banking and finance industry, the same is equally true of every industry that has accepted qualifications and professional bodies, and whose mission is to improve standards.
It is when organisations and individuals extricate themselves from these responsibilities, or place greater emphasis on short termism at the expense of more sustainable activity that unethical behaviour can arise. In the run-up to the 2008/9 financial crisis for instance, some banking and finance organisations put in place internal cultures which were largely focused on revenue generation and sales, rather than on customer support and service. Alongside this, the traditional banking exams which had underpinned the industry for decades were overlooked and consequently many in the industry eschewed their membership of a professional body.
Pleasingly however, this attitude appears to be changing. The appetite among the banks to address skills gaps to prevent future crises is growing and the need for flexible programmes of learning for professionals of all ages and experience is being acknowledged and pursued.
A lot has happened since 2008 and the banking and finance industry, like many others, has done a great deal of thinking about what it needs to do to restore trust. Many different organisations, including regulators, the government, professional bodies and the banks, are themselves debating what is the ‘right thing’ to do. Through this introspection a renewed emphasis on professional standards, we believe, will once again be seen as doing the “right thing”.
For more information on how The London Institute of Banking & Finance supports professionalism through its qualifications, please visit: http://www.libf.ac.uk/study/professional-qualifications
Martin Day is Managing Director, Corporate & Professional Qualifications, at The London Institute of Banking & Finance, where he holds responsibility for the development and provision of corporate and professional qualifications, ensuring they meet the needs of its students and their employers. Prior to this he worked as Director of International Business at Henley Business School, delivering its executive education and MBA programmes across its European and Asian networks. He has also held senior level positions at the Royal Bank of Scotland and Natwest, where he worked for nearly 20 years.
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