Barclays 2015 Annual Report Download - page 17

home.barclays/annualreport Barclays PLC Annual Report 2015 I 15
How we are doing
…acting with integrity in everything we do…
What we are doing
The Group continued to incur the significant costs of conduct matters
 Additional charges were recognised for customer redress including
£2.2bn for the cost of PPI remediation
 Resolution of these matters remains a necessary and important
part of delivering the Group’s strategy
 There are early signs that we are driving better outcomes for
customers from a more thoughtful consideration of our customers’
needs.
The 2018 target is for a Conduct Reputation (YouGov survey) score
of 6.5/10.
Case study
An Investment Bank client inadvertently elected to earn a lower
interest rate of 0.13% (instead of the correct interest rate of 0.30%)
on a $100m deposit cash trade. Operations staff identified the
mismatch and despite being legally entitled to proceed with the
lower interest rate, agreed that the right thing to do was to amend
the rate in favour of the client.
Barclays have teams in place that constantly monitor such
transactions in order to spot operational or system errors. Although
Barclays had the right to go ahead and apply the lower interest rate
(which would have cost the client £130,000) we instead amended
the trade in favour of the client.
By putting ourselves in our clients’ shoes, we have elected to achieve
our ambitions in the right way. We believe that our customers should
be able to trust us to have their best interest at heart as this ensures
long term profits through customer loyalty.
How we are doing
In 2015 Barclays made progress on its Conduct measure recording a
score of 5.4 (2014: 5.3). ‘Operates openly and transparently’, ‘Has high
quality products and services’ and ‘Delivers value for money for
customers and clients’ have all improved according to audience
perception. Performance on two components, ‘Treats staff well at all
levels of the business’ and ‘It can be trusted’ have declined slightly.
As a result of increased awareness and early consideration of conduct
risk in the business, a number of actions have been taken to improve
customer outcomes including:
 proactive consideration and management of potential customer
detriment associated with Barclays’ strategy to simplify its business
and products. For example, change programmes monitoring
customers subject to multiple changes including platform and online
migrations
 application of more stringent residential mortgage requirements to
buy-to-let mortgage applicants, ensuring better lending decisions
 improvements in key areas such as bereavement and power of
attorney and ongoing training to equip staff to support customers in
vulnerable circumstances
 enhanced surveillance monitoring in the Investment Bank identifying
and proactively managing activity which appeared to cause unusual
market impact
 separation plans of non-core businesses consider customer outcomes.
In 2016 there will be continued improvements of conduct risk
management across governance structures, MI, culture change
initiatives, risk management processes and enterprise-wide risk
management. There will also be further enhancements to how conduct
risk is considered in strategy setting.
Balanced Scorecard metric
Actual
2015
Actual
2014
Actual
2013
Conduct Reputation
(YouGov survey)
5.4/10 5.3/10 5.2/10
We are below where we would like to be for 2015, although
overall progress on the measure is in line with our
expectations and puts our 2018 targets within reach.
How we measure success
 The Conduct measure is developed through a Conduct
reputation survey, undertaken by YouGov, across a
range of respondents including business and political
stakeholders, the media, NGOs, charities and other
opinion formers
 The 2015 Conduct score, taken from two surveys, each
of 2,000 respondents, comprises questions relating to
transparency, employee welfare, quality and customer
value as well as trust
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