Ian Mullen, chief executive of the British Bankers' Association says he will be "a busy laddie" if allegations staff in call centres operated by BBA members are selling customer data proves correct.
Noting that the march of cross-border organised crime was challenging many industries, including financial services, and had forced even the UK government to recognise the severity of the situation in setting up a “UK FBI” in the form of the Serious Organised Crime Agency, Mullen said he would not rule out the allegations at this stage.
“If there’s truth to that I’m going to be a busy laddie,” Mullen says.
It is not the case organised crime has yet broached financial services in a big way, “but it is war,” Mullen adds.
Even without the spectre of organised crime, there are enough issues to keep Mullen up at night. He admits his worst nightmare is a repeat of what he estimates as a £22bn cost to industry of the pensions and mortgage endowment mis-selling scandals.
“It’s the all-time worst mistake of the financial services world.”
In customer service level terms there is an ongoing challenge to the banking sector in the fact it offers highly complex products, which are essentially abstracts he says are only really understood by “10% of the population”.
In previous days gone by this meant if people did not understand they would possibly hold the product and/or provider in awe. Such is not the case today, Mullen says. Today customers simply get annoyed.
The industry overall is only now waking up to this change in attitude, and starting to take the necessary steps to react, Mullen says.
Another nightmare facing the industry is slumping sales of PPI products. Mullen says the current benign credit cycle has lasted 16 years, a period unmatched in recorded history.
For those with memories of the last big recession in the UK, the downfall of the PPI product is major cause for concern, because the people who would be most likely to require such protection should the cycle turn are the very ones being priced out of the market as PPI premiums become increasingly unaffordable.
“It helped so many people [in the last recession] that if the cycle does turn, by gosh they are going to need that product.”
Mullen has added whatever the industry does to improve levels of customer service, there will always be those who are either “unbanked” or “unbankable”, which Mullen equates to ideas of being “unemployed” or “unemployable”.
In the case of an "unbankable" the example given is a person over the age of 70, who has never held a bank account in their life, and who, realistically, should not now be expected to start going into bank branches, or give up what may their only point of contact with financial services in the form of the Post Office counter.
Such consumers are extremely difficult to bring into the banking system, a point Mullen says is recognised in ongoing discussions with the government on the issue of universal access to banking services.
However, Mullen also says he expects the rural banking infrastructure to continue decreasing as the nationally available 10,000 bank branches and 14,000 Post Office branches are rationalised further.
Consolidation across European borders is not something he sees happening at lightning speed in the next five years. Two years ago, Mullen says, he held talks with his German counterpart, who stressed while the number of German banks - not branches – closing their doors could be counted at one a day, it would still take up to 10 years for the German banking market to become dominated by eight-10 big providers
Mullen made his comments at the Society of Consumer Affairs Professionals in Europe Annual Conference.
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