Interview with Roger Miles, UK Finance Academy

Roger Miles is Head of Faculty, UK Finance Academy and author of Culture Audit in Financial Services and Conduct Risk Management: a behavioural approach.

He discusses some prevailing trends in and beyond the financial services sector, exploring how the pandemic has interacted with these.

‘The ability of citizens to convene in groups’

We live in an era where we have massive collective knowledge – there’s now no question that can’t be answered with a Google search.

People band together through hashtags, social media, citizen journalism and blogging. They convene in groups with similar people who’ve had experiences they want to share, like #metoo, #blacklivesmatter and Extinction Rebellion.

They’re able to use a shared understanding as a lever for change. There’s an assumption that if you feel a certain way about something you can coalesce with a group of people who feel the same, get active, make a statement, change the world. That’s hugely exciting.

For big institutions and vested interests, it also brings ‘vox pop risk’ – having any bad behaviour called out by each ordinary citizen (and employee). That’s also, generally, a force for good.

‘Covid has acted as a lens’

The era when brands could control the narrative is long gone. We should observe not what people say should be happening at a corporate level, but what it means in practice for our own staff and customers.

And it’s increasingly difficult to drive a wedge between them. Staff more and more behave like external consumers looking in.

Covid has acted as a lens that’s focused on this; for example there’s a wonderful citizen website set up in response to Covid, called didtheyhelp.com. It invites anyone to call out any service they interact with – branded service providers, political leaders, local councils, whatever – and report what was the response of these institutions, how did they deal with individuals’ own personal issues around managing Covid.

This vox pop risk counterbalances the corporate narratives that people were so used to hearing, and in many cases becoming sceptical of.

A lot of the Covid narrative was initially focused upon the NHS, with the doctors and nurses as heroes. More recently there’s been a much bigger discussion around why nurses are paid so little to take life-threatening risks. Is it because their sense of vocation is discounted against what we’re willing to pay them? Is that right?

‘Big changes in our perception of governance’

I wonder if Covid is going to be one of those moments in history where we see a massive change in citizen engagement.

When you look at the history of those big turning points in the social perception of evidence, there’s also big changes in our perception of governance.

Think of the engagement you saw in the 50s and 60s around human rights or nuclear power. We’ve seen a resurgence in direct challenge to politics, to governance institutions. Although at first, the financial crash seemed to pass without much co-ordinated popular pressure for reforms.

What’s worrying employers now is the clear evidence from Covid that the advent of working from home has made people really rethink: ‘Why am I going to an office?’, ‘What am I doing when I get there?’ And on a more existential level: ‘What is the purpose of my employment?’, ‘What is my employer doing that leaves behind something greater than themselves?’

‘They see it as ethically contaminated’

I’ve been workshopping a thought-experiment with banks, that we informally call ‘The Scrooge Test’, after the Dickens character. In the scenario, I ask business leaders to imagine that their brand has imploded during the night. Then ask them, imagine a funeral for it: who’s mourning, and who’s cheering? If most people are cheering, you’re doing something wrong; maybe it’s time to rethink your values.

Until it rethinks its culture, the financial sector will continue to face a growing crisis of recruitment. Absent clearer ethics, it could become a place where mediocre people work, rather than the best and brightest. The research shows that millennials – who are now more than half the banks’ workforce – are less and less motivated by money. Say you’re a 23-year-old, looking at a career post-financial crash, post-Covid. You’ve received equivalent job offers from a tech company, a marketing company and a financial services firm. You won’t even look at the financial services offer; you see it as ethically contaminated.

‘Ethical issues around security and surveillance’

Making people work from home has raised ethical issues around security and surveillance. When somebody’s working in a trading room their every move is surveilled – there’s an eyeball tracker, a click tracker. Any electronic channel of communication they’re using is constantly watched over.

Some banks have now installed professional level surveillance on peoples’ laptops at home. And quite reasonably, staff turned round and said this is not okay. I may be working, but I am at home. In people’s mental model, “working” and “being at home” are different, separate things. The fact that I’m working does not give you as an employer the right to install a camera on my laptop, to check when I’m taking breaks, or if what I’m reading on the screen is work related.

‘A challenge to the social contract’

This has also brought a fresh challenge to the social contract of employers expecting 100% of people all the time. That assumed contract isn’t working very well – since it isn’t healthy.

Employers talk about employee engagement, but what they often expect is unquestioning loyalty. That’s a one-way street.

Many employees are now challenging this, saying “Why should I give you the benefit of my work, and maybe taking risks on your behalf, whilst you as my employer treat me as if I’m under suspicion all the time?”

‘Clusters of bad behaviour by certain brands’

We’ve been interrogating this whole area of assumed loyalty, working with an American research company called Violation Tracker.

They are compiling a database of employers who have long track records of carelessly violating employment standards, environmental standards and market trading standards. It finds clusters of bad behaviour by certain brands and acts as a warning to potential employees not to work for them.

One of the categories they highlight is ‘wage theft’ – where employers put obstacles in the way of employees getting a proper rate of return for the hours that they work. That exploitative assumption that you’re not actually contracted for a fixed working time, but that “we employers ‘own’ your life”, is being challenged.

‘Mental health, wellbeing and family circumstances’

Overall awareness of people’s home circumstances has risen. In the past there’s been a lot of lip service paid to mental health, wellbeing and family circumstances.

Since Covid, the conversation’s become more serious and reflective. There’s a willingness to understand the pressures that, for example, young parents face getting childcare.

Employers have had to get a much better understanding of the pressures that people have. This idea of bringing your whole self to work was more of just a ‘fashion statement’ a while back. Now it’s become a real thing, and that’s a healthy development.

‘These are human beings I’m dealing with’

Zoom meetings have also changed the nature of encounters – the ‘semiotics’. It’s a simple matter of physics. In a dealing room for example, a trader is sitting looking at a bank of screens most of the day. This physical barrier means not spending very much time looking at people, instead conversing through a mediated structure of electronic blips, clicks and data screens.

On Zoom, though, simply having people physically look at each other eye to eye has made everyone pause to think, ‘Hey, these are human beings I’m dealing with, rather than just a trading system’. These windows into people’s lives have been absolutely fascinating.

As behavioural science recognizes: Put a human face on an abstract problem, make it a story, then people are far more likely to engage with it.

‘Take care not to indulge your cognitive skew’

There’s a constituency of people who weren’t much listened to when Covid first hit – the younger employees coming through. The graduates, and into their 30s, struggling on the housing ladder. These people were sent off to work remotely and many found themselves living and working in just a bedroom. For them it was a fairly horrible experience.

The problem was that the senior managers opining about hybrid working tended to be comfortably ensconced in a nice house with its own office. Employers are starting to realise that there’s a cognitive skew, so be careful: senior people haven’t had to cope anything like their junior staff have.

‘Present bias is baked into the design’

When I’m teaching the psychology of risk perception, we often look at a massive societal problem called ‘present bias’.

Humans tend to be poor at thinking about the future, particularly the distant future. Unfortunately, present bias – short-term thinking – has become baked into the design of our corporate reporting systems and the political electoral cycle. As most politicians want to get re-elected, they need to achieve short-term wins.

Similarly, corporate reward systems are based on annual returns. Bonus packages for chief execs are triggered during three- to five-year contracts, not longer.

So the entire system works against humankind engaging with long-term, complex, trans-national problems. Any problem that resists fitting a quick-solution model tends to get ignored. Climate change is absolutely the biggest of those.

I’m afraid the climate crisis is going to be yet another case of ‘planning fallacy’: the way so many big projects miss their deadlines. We could blame 20th century economists and lawyers, for making us all feel we need instant certainty. But look out, now we’re in the 21st century, the planet’s on fire, and we’re way overdue a wholesale rethink of all kinds of governance, to properly engage with this.

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