One of the UK's biggest banking trade unions has claimed that a "performance rating bias" against branch staff of Lloyds Banking Group is proof that a sales-driven culture still dominates retail banking.


The allegation, made by Lloyds Trade Union in a recent newsletter, raises questions about how much customer service is improving in Scotland's bank branches.

The Financial Conduct Authority said earlier this year that banks had all cleaned up their rewards systems to ensure staff were not motivated to push products to customers, following the PPI scandal which has seen the banks pay out £16billion, and Lloyds itself make provisions of over £10bn for mis-selling.

Banks have typically moved staff onto 'balanced scorecards' which put a strong emphasis on customer feedback.

But Mark Brown, general secretary of LTU, claimed: "Balanced scorecards are anything but balanced at the moment and sales performance is still the key driver of performance ratings."

He went on: "During a wide-ranging discussion, last week we told the Financial Conduct Authority that if they were to ask front line retail banking staff in Lloyds Banking Group, and other similar organisations, which factors on their 'balanced scorecards' had more influence on their performance ratings, the overwhelming majority of staff would say it was sales performance, however it's described."

A spokeswoman for the FCA said she couldn't comment on specific firms or meetings. She added: "I can confirm that in our 2014/15 business plan, we have committed to looking at how firms manage the performance of their sales staff and whether pressure put on staff - through, for example, sales targets - increases the risk of mis-selling."

Lloyds Banking Group said that from next month staff performance would be rated "solely on customer feedback".

In October, LBG announced it would be shedding 9000 jobs and closing 150 branches in the next three years as the group focuses more on digital banking; it is estimated that around 10 million customers access Lloyds Bank through their mobile or the internet.

Digital banking activity is now worth almost £1bn a day, according to the British Bankers' Association, while footfall in high street banks is falling 10 per cent a year on average. Mobile banking transactions alone more than doubled in 2013.

So if you are looking for good customer service, should you shun bank branches altogether?

A poll carried out by the Institute of Customer Service this autumn found seven leading banks had scored "below average" for consumer satisfaction. In response to a query from The Herald the ICS would not identify the banks.

But Jo Causon, chief executive of the ICS, said first direct had achieved the highest customer satisfaction score out of any bank or building society this year, despite having no branches whatsoever. Available only online and over the phone, the HSBC subsidiary is most famous for its satisfaction guarantee, where new customers receive £100 for switching to its current account and another £100 if they decide to leave within 12 months. It is also currently offering a £250 interest free overdraft for new switchers.

Then there is supermarket giant Tesco, which launched an entirely digital bank in 2008 in conjunction with Royal Bank of Scotland and, having bought out RBS, moved into current accounts for the first time this year. The Edinburgh-based bank was described by the ICS as the fastest improving bank and the second most improved organisation in the UK this year.

Unlike first direct, Tesco doesn't provide a cash bonus for new customers but it does offer 3 per cent AER on balances up to £3,000. Anyone paying in more than £750 a month will also see their £5 monthly account fee waived.

However, Nationwide also achieved the second highest score in the ICS poll, followed closely by the Co-operative Bank. Nationwide has 47 branches in Scotland, including 16 merged with former Dunfermline building society branches, while the Cooperative has three.

Nationwide said last month it was ranked number one for customer service satisfaction on the high street for the third consecutive year, strengthening its lead over competitors, and the number one high street financial services provider, in Nunwood's 2014 'UK Customer Experience Excellence' study.

Indeed, the ICS said that the banking sector was rated highly "for professionalism of staff and problem-solving, demonstrating the positive role of high street branches" , and expectations had been "exceeded" for 17 per cent of banking customers and "not met" for 12 per cent.