PPI mis selling is the UK’s biggest financial scandal in history. However, the UK banking industry risks another possible PPI mis-selling-level scandal in the future if they don’t act today. Things might be different though because banks are showing signs they don’t want to repeat the same mistake.
According to Equiniti Marketing Head Andrew Aldred, banks do not want to damage consumer confidence any further.
In the previous year, banks had lost much faith from consumers following their Libor and Forex rigging, unfair payday lending practices, mis selling interest-rate hedging products for smaller business, and more.
However, Aldred stresses that the UK media did not focus on bank actions after their sequence of disappointments. With further investment in their employees, processes and systems, banks continue to improve their risk-monitoring activities and create pressure-avoiding performance management schemes.
According to most analysts, employee pressure and a disorganised incentives system is to blame for PPI mis selling.
UK financial watchdogs are also on the lookout for any potential risks by digging deeper into bank performance and assessment schemes. Instead of focusing on penalising banks with poor performance, they focus their efforts to prevent the situation from becoming worse.