Chief Executive of Citizens Advice Gillian Guy

Gillian Guy speaks at BBA Retail Banking Conference 2017

At the recent BBA Annual Retail Banking Conference in June, our Board member, Citizens Advice Chief Executive Gillian Guy spoke on giving a voice to those who need the banking industry’s help and support, touching on issues of trust, loyalty and vulnerability.
Gillian has given kind permission for us to reproduce her speech below.


Thanks to the BBA for affording me this slot – and so highlighting the need to give voice to those who need the banking industry’s help and support.

I hope that Citizens Advice is well known to you – principally, I expect, for giving advice and support to millions of people each year – many of whom are especially vulnerable.

Possibly less well known will be the fact that we give advice to an extremely wide range of people – particularly regarding debt and consumer issues – encompassing your customers , your would-be customers and probably not insignificant numbers of your staff.

And we take the evidence from those millions of people and highlight major issues for consumers and where appropriate seek redress. Not sure if I should remind you here that it was Citizens Advice who made the original super complaint about the mis-selling of PPI. which, as you know, led to over £24 billion being returned to consumers.

More than that though – we look to identify changes in policy and practice to fix problems and stop them recurring and we work with Government, regulators and the industry (including the BBA and Banking Standards Board ) to make them happen.

At Citizens Advice we have the insights that can help you succeed for your customers.

And it is in all our interests to use them to good effect.

We see at first hand processes and practices which result in detriment – often to those who are least able to withstand it.

At a deeper level, we see a more profound cultural challenge.

And a need for social purpose commensurate with the responsibility of providing an essential service – and enjoying a significant share of the balance of power.

Today, I want to talk about the relationship of banks with customers, vulnerable and not – and with wider society. And I want to give a couple of examples which undermine it.

And I want to start with trust.

The banking industry has a clear sense that it does not hold the position in society it once did. This is often expressed by asking why the public no longer trust or understand it and has led to a bit of a mission – to regain or rebuild trust.

In my view – it is a search to recover something you never truly had. I believe we have mistaken deferential treatment (based on faith – or sometimes, fear ) for trust – which is far more of an emotional buy – in.

It is true that bad things happened ( and indeed continue to ) which seriously damaged the image and reputation of the industry – but there was a broader change going on too.

Banks – along with others – (even doctors and lawyers!) suffered a loss of deference attached to their positions of authority – as consumer confidence and expectations of service providers, massively increased.

Instead of harking back to times past, I think we need a re-set on two fronts: firstly – addressing the question – what are banks for and what social responsibility do they carry?

This goes to the heart of a responsibility that comes with the unique territory occupied by financial services – which is far wider than the business, the shareholder interest and the customer relationship.

Happily, social purpose and social value are the subjects of a live debate and the tone is shifting.

But, I am afraid that large sums of money spent on soft focus advertising, claiming at once to be best friend and guardian only fuel deep scepticism with exaggerated sentimentality and sincerity.

And the old cliche holds true actions speak louder than words.

A higher purpose should be evidenced:

  • by how you choose to use your deep – sometimes intimate – understanding of consumer behaviour – to help – not exploit.
  • by the transparency and clarity of communications and terms and conditions – so consumers can make informed choices.
  • by what you do proactively to move people to better deals
  • by your offer of support and advice to avoid early warning signs developing into problems

And by targeted support and protections for your most vulnerable customers. This is not to take away from individual personal responsibility, but gives consumers a fighting chance to exercise it.

The second front is to establish that the industry is trustworthy.

At the heart of being trustworthy is openness and honesty.

Put at its simplest this amounts to – say what you mean and do what you say.

I’ll give you a couple of examples where we see this lacking – in the areas of vulnerability – and loyalty – and a not so sweet spot where the two collide.

Everyone wants a piece of vulnerability and it’s a good focus to have. It brings about some very good initiatives.

We were hugely encouraged by many of you picking up the issue of financial abuse and really examining your processes to thwart this behaviour.

But when it comes to basic bank accounts, ID and verification and overdraft charges, the emphasis has been on process and protection with little attention to the impact on individuals.

We still see products that are structured in a way that delivers higher prices and detrimental treatment to vulnerable people.

Customer loyalty is an issue of great concern to us and it should be to you, Loyalty is laden with sentiment and value judgements. But loyalty is supposed to be rewarded.

People who stick with a provider expect to be put first.

Unfortunately at Citizens Advice we all too often see the opposite. Longstanding customers paying more, and being treated worse, than new ones.

Next month we will report on the fate of loyal customers whose fixed rate mortgages come to an end – it’s not a pretty picture. For example, 85% of people on standard variable tariffs would be better off on a fixed deal.

And here’s the double whammy – business models that penalise loyalty also punish vulnerability. Because it’s your older, less educated, lower income, mentally and physically disabled and distracted customers who are most likely to be disengaged.

The current accepted narrative is that the answer is switching. And that can work for people. But, for some people, particularly the most vulnerable, it’s doesn’t work at all..

And it’s not a solution in itself. It puts the onus on the customer but It doesn’t absolve the industry of responsibility.

And why should you care enough to take action?

You will have worked out the competitive advantage angle – add to that – staying ahead of the regulator.

In the last few years regulators have investigated the current account market, the savings markets, the credit card market, the mortgages market, the annuities market…

The list could go on. And it can’t be right that our ‘world-leading’ financial services sector has to be told what to do by a regulator about things as simple as giving people clear information.

Voluntary action prompted by responsibility and integrity is far more effective – and results in a race to the top rather than bottom – (as I would argue happened in the end with basic bank accounts). It also puts the emphasis rightly on motivation rather than compliance.

And you should care so you can turn the potentially onerous social responsibility to your advantage, to shore up the fragile reputation of the industry and lay those foundations for trustworthiness.

Challenge: new body, new opportunity

As we sit here – we are on the verge of launching your new trade body – indeed – only I stand between you and the new Chair!

I have already picked up two key messages from UK Finance -consumers will be at its heart and it will not defend the indefensible.

That is a brave stand for any trade association and to be applauded – It should herald and support a new shake up within the industry.

At Citizens Advice we wish UK Finance well and stand ready to help them – and all of you – in that endeavour.