Efforts must be made to ensure that the UK is the safest and most transparent place to conduct financial services business, writes UK Finance CEO Stephen Jones.

Ten years on from the global financial crisis, and inevitably conversations turn to bank conduct and reform. Are banking crises inevitable? Would the causes of any future crisis be the same as in the past? Has bankers’ behaviour really changed?

Is the UK’s large financial services sector a force for good? Our social and economic purpose as an industry is clear. Helping a small business to grow; helping a family to buy its own home; powering seamless, instant payments that have made e-commerce possible; providing trade finance and risk management for an exporter entering new markets; driving efficient, transparent and secure financial markets; and providing support when the unexpected happens, when vulnerability strikes. And, within our institutions, powering diversity, inclusion, opportunity, participation and security.

As a world-class industry, the sector provides employment, directly and indirectly, for millions of people. In 2017, exports of UK financial services were worth close to £60bn ($78bn), accounting for more than one-fifth of total UK service exports. We are the largest sector in the UK in terms of our tax contribution.

Constant development

The importance of the banking and finance industry to the continued economic success of the country is therefore clear. Trade association UK Finance is now 18 months into our existence, and in these uncertain times we continue to develop our strategy of supporting the UK as one of the world’s great global financial centres, ensuring that we are the safest and most transparent place to conduct financial services business, and seeking to act in the interests of the customers we serve and the society that relies on us.

Since launching we have sought to establish a new type of trade association, one that represents and is responsive to the needs of the wide range of organisations that make up our membership, and at the same time is acutely sensitive to the role that our members play in the wider economy and society at large.

But what does this mean in practicality? A topic that has been high on the agenda for UK Finance is economic crime. Fraud alone is estimated to cost individuals in the UK £6.8bn a year, while the amount of illegal money laundering flowing through the UK annually is estimated to exceed £90bn a year. UK banks spend more than £5bn every year fighting economic crime.

In response to the ongoing threat, we recently announced the launch of an industry-wide Financial Sector Cyber Collaboration Centre, which will see firms working together to share threat information and improve the resilience of our financial backbone to cyber attacks. We and our members have also worked with government on wholesale reform of the Suspicious Activity Reports regime to ensure that our fight against money laundering is ever more effective. A draft code to reduce and reimburse victims of authorised push payment fraud – something that has become an increasing threat – has been developed with our input and industry collaboration. We also launched the industry-wide Banking Protocol scheme, which has prevented fraud worth more than £30m and led to nearly 250 arrests since being introduced.

Our government-backed consumer fraud education campaign, Take Five to Stop Fraud, is helping consumers to spot the signs of a scam. The campaign aims to give people the confidence to challenge requests for their personal and financial information.

Climate care

Customer vulnerability has also been high on the agenda. Working with representatives from charities, victim support groups, government and members we developed and implemented a Financial Abuse Code of Practice, to ensure greater support and better outcomes for customers in vulnerable circumstances. This follows the recommendations of the Financial Services Vulnerability Taskforce.

We commissioned an independent review into dispute resolution for small and medium-sized businesses, with the aim of creating a fairer business banking landscape. This was chaired by former director-general of the Institute of Economic Affairs, Simon Walker, who published his report in October. We will be working with banks, government and regulators to look at how we can best take the recommendations forward.

In other major work, we responded to the authorities’ discussion paper on the most significant business and regulatory challenge of the future, namely operational resilience. Within this we look at the issue of climate change, given that we are exhausting the natural resources of our planet at an unsustainable rate. November 2018 saw the publication of a Prudential Regulation Authority consultation paper and a Financial Conduct Authority discussion paper setting out supervisory expectations in respect of climate-related financial risks. Both have placed adherence to the Financial Stability Board-sponsored Taskforce on Climate-related Financial Disclosures at the centre of their proposed approaches.

An impressive array of banks, asset managers, pension funds, insurers and others have already signed up to bringing climate considerations more firmly within their core governance and risk management processes. We must all do so for the sake of future generations. We have no choice.

Stephen Jones is CEO of  trade association UK Finance.

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