Bank Culture Reform: Hong Kong Monetary Authority Commences Review Of Retail Banks’ Front Office Incentive Systems.

The review is considered important by the HKMA given that incentive systems play a crucial role in driving sound behaviour and affecting customer outcomes.
 

Further details will be provided to the selected banks individually, but at a high level, the review aims to dive deeply into specific areas of incentive systems, including:

·         how the incentive systems of the front offices are designed and implemented; and 
 

·         how these systems drive behaviours of frontline staff and affect customer outcomes, in particular their role in minimising potential misconduct behaviour and mis-selling practices in the sale and distribution of banking, investment and insurance products. 

An external consultant will undertake a range of activities with the selected retail banks, including:
 

·         employee surveys;

·         focus group discussions;

·         interviews with employees; and

·         review of documentation.
 

The HKMA plans to share with the industry the insights and common practices identified in the review and consider the need for any further guidance.  It may also follow up with individual banks where issues are identified in the course of the review.

What other steps are the HKMA taking or has planned to take in relation to bank culture?