The Latest Headlines From Across The Banking Sector - June

2021-07-07 |  Ben Dineen

Back in December when we made our Top Ten predictions for 2021, we forecast ESG would be an increasing part of senior management conversations. And so it has proven. This months headlines focus on ESG in the banking sector and plans to return to the office.

ESG is making headway within the banking sector

  • As climate change reporting took centre stage in the G7 summit, banks have started thinking about what ESG means for them
  • There have been multiple initiatives that the regulators have initiated, such as the recommendations from the Taskforce of Climate related Financial Disclosures (TCFD) and the “Dear CEO” letters from the PRA
  • However, it is only now that banks are starting to look at ESG more holistically than the bare minimum recommendation of embedding climate change within the risk framework:
    • HSBC is sending their commercial banking staff to sustainability school to better support UK businesses and transition to “net zero”
    • Similarly, UK’s first carbon-neutral mortgage was launched by Danske Bank this month, offset by investing in projects that reduce emissions by the same amount as those generated by providing its mortgages
    • “Impact driven digital banking app” is being launched by Visa which helps customers track their carbon footprint and offset their impact by choosing to contribute to multiple ESG initiatives
  • Momentum is starting to build; however, ESG has a lot further to go before it is simply ‘part of doing business'. At PEN we are hosting a roundtable with banks and building society executives to understand how ESG initiatives can be embedded within their front and back office to contribute to a more sustainable future. Please get in touch if you would be interested in attending

Deadlines set for return to office

  • A survey from the Office for National Statistics captured business attitudes towards the future of working, revealing 85% of respondents wanting to use a hybrid approach to working in the future
  • A number of organisations have taken a similar steer from staff surveys too (see Nationwide, LBG) and are working towards a hybrid solution – it will only be clear how successful this is once more staff return to office and the approach is tested
  • This isn’t the case for all organisations. In the US, Bank of America have announced that all vaccinated staff will return to office, while Morgan Stanley’s CEO also expects staff back in September
  • Morgan Stanley, along with Goldman Sachs, also announced they will pay interns to quarantine in hotels before they start internships this summer
  • Whatever approach organisations go for, a consensus is needed between leaders and staff considering hybrid, remote and traditional models and clarity on how they will work in the short and long term

And in case you missed it…

  • Figures from the BoE published this month showed consumer borrowing rose in May for the first time since August, a sign of the economy opening-up
  • JP Morgan acquired nutmeg providing them with an investment solution that will complement the retail banking proposition they’re due to launch later this year
  • The Bank of England’s Deputy Governor gave an indication that the UK’s historically low interest rates may be pushed up if needed to offset a permanent rise in inflation as he closely monitors the rise in house prices, while at the same time suggesting if inflation were to stay low, they have policies ready to encourage spending
  • The UK Finance 2021 Payments Markets report gave us few surprises with its summary of payments in the last year, with contactless and mobile payments growing in the UK, and cash payments reducing significantly

Each month we send out a regular email summary of the latest headlines from across the Banking sector that have caught our eye. If this sounds like something that interests you, please sign up to our monthly Banking Headlines here.