It’s over 300 years since Barclays Bank was set up by a group of Quakers in the UK, built on a foundation of integrity. What those founding fathers would have made of Barclays behaviour in the early part of the 21st century can only be speculated on.
This week the bank admitted to having paid out £1.45 billion in its most recent financial quarter on compensation for ripping off customers as part of the wider banking industry PPI insurance scandal. More was paid out in fines for foreign exchange rigging.
It’s not a pretty picture. CEO Jes Staley concedes:
It is fair to question whether bankers lost their moral compass during the 90s, in the first decade of this century, because of the single-minded pursuit of personal wealth. A company that retains the loyalty of its employees solely based on compensation is a company that gambles with his institutional culture.
But it’s with the values of the founders in mind that Staley has instigated a major restructuring of the firm - and it’s a shake-up that’s going to rely on technologically-enabled operational efficiency to succeed.
Barclays will be broken into two clearly-defined divisions: Barclays UK, and Barclays corporate and international. Staley explains:
Barclays UK will ultimately become our UK ring-fenced bank: resilient, and compliant with all regulatory requirements.
Next, Barclays corporate and international will comprise our market-leading corporate banking business, our Barclaycard operations in Europe and the US, and our both bracket investment bank.
These core divisions are equally important to the Group, complementing each other, and represent the future of Barclays.
Achieving our goals will be heavily dependent on the strength of our operations and technology functions and on our ability to prudently manage risk.
With that in mind, Barclays has appointed a Chief Operating Officer in the shape of Paul Compton and a Chief Risk Officer, CS Venkat.
Technology and innovation in delivery of financial services will underpin the new operational structure, says Staley:
Barclays UK will continue to pioneer innovation in the provision of consumer financial services. From the issuance of the first credit card in Britain 50 years ago to the introduction of the first ATM machine, Barclays has always been a leader in technology.
Today, Barclays UK mobile capabilities set the market standard. And the business has also introduced innovations and payments, such as bPay and Pingit, which expand convenience for consumers and small businesses. Barclays UK will continue this pursuit, and I believe it will be source of significant competitive advantage for the Group going forward.
(That said, Barclays will finally support Apple Pay next month, the last major UK bank to do so.)
As for corporate, Staley says:
It is an innovative business, which has cleverly used technology to service corporate banking clients in a digital age. From cutting-edge secure online access to accounts, to common payment platforms across the UK, Europe, and Africa; the introduction of Barclays Collect; and the provision of mobile check imaging, we have been and will continue to be, pioneers in this space.
Staley also sees growth opportunities in digital consumer payments market:
Our cards business in Barclays corporate and international is a large scale, fast growing, high-margin operation. It includes Barclaycard US.; Barclaycard Germany; Barclaycard Business Solutions and our inter-card joint venture in the Nordics. Our model has made us the number five co-branded credit card issuer in the United States with more than 13 million card customers. With US card spend of about £45 billion the prospects for continuing growth are strong, without taking imprudent credit risk.
A growing consumer-payments proposition is a true differentiator globally. We are the second-largest merchant acquirer in the UK, and deliver extensive payment solutions, such as mobile and in-store payment acceptance, point of sale financing, and corporate credit card solutions. As such, we see considerable potential in growth opportunities for our international payments business and our traditional corporate payments offering, allying them closing with our institutional clients, particularly in the US.
If I achieve nothing else during my tenure at Barclays, I want to play my part in the continuing restoration of the cultures and the values that underpinned the founding of Barclays more than three centuries ago.
I joined banking back in 1979 because I was excited to be part of a respected profession, profession of Banking. Being a banker back then was a little bit like being a lawyer, or being a doctor…It was a profession, because it was moored to a commitment for integrity.
We will become known for our conduct; not because of the negative headlines that our past conduct generated, but because of the respect our conduct will engender in the future.
If that sounds a tad too close to being a PR mission statement, then you could be forgiven for thinking that. Listening to Staley’s high-minded words about integrity and corporate values, it’s clearly intended to be inspirational. But the battered reputation of banking in the UK needs more than fine words and aspirational assertions.
I am a former Barclays customer. While the standard of customer services across most of the big high street retail banks in the UK is generally shocking, Barclays took things to a whole new low in my experience. My tipping point for quitting came when, after I’d waited in line for 20 minutes, the Business Banking cashier behind the counter didn’t even look up as he said, “I’m going to lunch” and pulled his shutter down.
What's interesting about Staley’s comments - and rather depressing - is the lack of any mention of the customer experience or customer satisfaction. It’s all about improving the image of the bank. He boasts of the 23 million customers that the retail arm has, but says nothing about how he intends to make them happier.
In the recent Which? study into customer satisfaction levels among customers of leading banks, Barclays languishes near the bottom. It's unlikely that that would be something to make the Quaker founders happy.