The UK Financial Conduct Authority (FCA) has urged retail banks to improve their incentive schemes, which played a major role in the miss-selling scandals recently.
In its latest review of incentives schemes, the FCA found that one in ten retail banks with sales teams had risky incentive schemes and were not managing them properly.
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Some of the areas where FCA wanted retail banks to improve were checking for spikes or trends in the sales patterns of individuals, monitoring face-to-face sales conversations, managing risks in discretionary incentive schemes and balanced scorecards, and monitoring non-advised sales, among others.
FCA CEO, Martin Wheatley, said eighteen months ago they gave the industry a wake-up call and it recognised that a poor incentive culture had helped push bad sales practise, which led to miss-selling.
"We’ve seen some good progress but it is going to take time to see whether the changes firms have made to incentive schemes and their controls stick, and whether good beginnings are part of genuine cultural change. But consumers can be assured that this remains an area that we will be watching closely to ensure poor practise doesn’t return," Wheatley added.
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