Is Barclays really pioneering a new banking culture?

Barclays’ reputation has been plagued by financial scandal and a controversial bonus culture, and now boss Antony Jenkins says it’s time to reinvent British banking. Sceptics are wary, but could it open up a dialogue that will see real change?

After a year of scandalous revelations culminating in group chief executive Antony Jenkins announcing his intention to implement a “new set of values” within banking, Barclays has published its strategic review and commitments for 2015.

The document sets out plans to: shut its controversial structured capital markets (SCM) unit, which is responsible for giving tax advice to the bank’s wealthiest clients; reduce costs by £1.7bn by 2015; provide greater transparency and disclosure; and to publish an annual ‘scorecard’ assessing performance.

However, 3,700 jobs are to be axed, the bank’s investment arm will continue to dominate the business and Barclays will retain a large ‘bonus pool’ of £1.85bn (cut from £2.2bn). As such, many are questioning the authenticity of Jenkins’ Project Transform, a five-year plan designed to restore the bank’s reputation and create what he calls a “go-to” bank built on ethics and trust.

According to campaign group Move Your Money, “insiders say that reforms will prove to be largely cosmetic,” with the group’s chief executive, Laura Willoughby, asking: “How can customers have confidence in Jenkins’ claim to be building a ‘better bank for customers and Britain’ while he continues to sweep bad news under the carpet and refuses to implement the fundamental changes needed?”

“Some industry figures believe that the very fact that one of the big five banks is having a conversation about ethics and transparency is in itself a turning point for banking culture in the UK”

Similarly, director of Positive Money, Ben Dyson, says: “The strategic review is completely inward-looking; there’s also no recognition of Barclays’ impact on the wider economy and society. But even if Barclays was making the effort to be more aware of its own impact on the world, it’s not enough just to worry about the actions of one bank. It is the banking system as a whole.”

However, some industry figures believe that the very fact that one of the big five banks is having a conversation about ethics and transparency is in itself a turning point for banking culture in the UK.

“It remains to be seen whether Jenkins’ plan is just PR spin, or if it’s a genuine change of tack,” says William Ferguson, communications officer at ethically driven Triodos Bank. “Nonetheless, it’s opened up a conversation about much-needed change – a conversation that wasn’t really happening before among the major banks. Clearly this is a positive thing.

“When Nestlé launched its first Fairtrade product, there was a lot of discussion about whether it was a genuine sustainability move or even if Nestlé should be allowed to have such a product. Still, it marked the beginning of a whole new way of thinking in that area. Slow steps at first, then growing into something really beneficial. We would hope the same will apply to Barclays and the big five banks overall. The important thing is that they’re having these discussions.”

At a breakfast meeting with hand-picked charities and NGOs on 13 February 2013, Jenkins said that he views transforming the banking industry as a “call to action.”

“I understand the cynics and the sceptics,” he said. “I use it as an energy to drive me forward. I also know we are not going to change anything if we are cynical and sceptical.”

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