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Banking sector still has ‘some way to go’ to demonstrate value to society and rebuild trust



Challenger banks examine the impact of 2008 Global Financial Crisis on banking culture..

The banking sector has changed, but there is still more to do, according to a panel of challenger bank executives and risk consultants at a panel event examining whether banking culture has changed since the 2008 Global Financial Crisis (‘GFC’). The event coincided with the 10-year anniversary of the flash sale of Bear Stearns, one of the major early casualties of the crisis.

Speakers included Philip Acton, CEO of CivilisedBank; Jon Hall, Managing Director at Masthaven; Graham Olive, Deputy CEO at OakNorth; Damien Burke, Partner and Head of Regulatory at 4most, and; Gary Wilkinson, CEO of Redwood Bank.

Panelists noted that although recent scandals spanning across various industries have demonstrated that bad behaviour is not something exclusive to banking, trust in banking remains low.

Philip Acton, Chief Executive Officer, CivilisedBank said: “According to our research, a quarter of UK business executives still think nothing has changed in banking since the crisis, and 3 in 10 are undecided as to whether behaviour has changed for the better. Many of the familiar complaints such as a focus on profit over integrity, closure of branches and poor customer service remain, all of which indicates that despite good work being done this has not resonated with the wider public.”

Gary Wilkinson, CEO, RedwoodBank said: “There’s no doubt about it, the fall-out that occurred once Bear Stearns got bought out by JP Morgan, ripped a huge hole in Britain’s finances. Slowly and surely, and with new challenger banks leading the way, the mainstream banks have done a lot to refocus and rebuild their businesses over the last 10 years. Together, the industry is looking to put the doom and gloom of the last decade behind it.”

Jon Hall, Managing Director, Masthaven said: “High street banks will take generations to see a return to trust. As new challengers we don’t have a legacy to overcome and customers are positively electing to use us, but we mustn’t forget the lessons of the recent past and we must seek to earn that trust anew at every touchpoint.”

Each speaker also noted that, since the GFC, the banking industry has been subject to vast regulatory and technical change which has already had an impact, in particular the emergence of challenger and specialist banks stepping up to fill the void.

Graham Olive, Deputy CEO, OakNorth said: “Banks remain hamstrung by a lack of confident decision making and an inability to effectively manage some aspects of the regulatory environment – for example, there’s no real appetite for residential development and extremely painful account opening procedures.”

“The speed of technological change is also leaving them unable to develop coherent strategies for some of their niche markets. The ‘one stop shop’ banking model is broken, and in a few decades time there will be students graduating who will never have held a current account because they haven’t needed one. This has created the conditions for the rise of challenger and specialist competitors.”

PSD2 and the changes in Open Banking were cited in particular as providing an opportunity for challenger banks to benefit.

Damien Burke, Partner & Head of Regulatory, 4most said: “From a market competition perspective, arguably the most important piece of regulatory change has been the recent introduction of open banking, enabled by PSD2, which has the potential to remove barriers to entry for challenger banks and threaten the dominance of established players.”

“By forcing the major banks to allow third parties (including challenger banks) to access the data of customers, it greatly levels the playing field between larger and smaller banks and allows challengers to offer consumers more appropriate and competitive products.”

Philip Acton of CivilisedBank concluded: “A lot has been done to take stock and to rectify what went wrong in 2008, but it’s important to remember that the next crisis won’t be like the last one. We mustn’t think that by fixing the problems of the past we fix those of the future.”


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