RBS scraps bonuses for 20,000 staff in bid to avoid future mis-selling scandals
Royal Bank of Scotland is scrapping bonuses for 20,000 of its retail staff in a bid to avoid future mis-selling scandals, and will, instead, give pay rises to staff in Natwest and RBS branches . The sales and bonus culture in banks was highlighted in a £28m fine on Lloyds in 2013, when one employee was so desperate to make sure he did not get demoted or miss out on his bonus that he sold himself one of the financial services products.

Royal Bank of Scotland is to remove cash bonuses for 20,000 branch staff as the lender attempts to improve focus on customers.

The bank will scrap incentives for all customer-facing staff, including mortgage advisers and branch managers, and will instead increase their salaries by an average 5 per cent, the Financial Times reports.

The move, which will come into effect from the start of next year, “significantly decreases any likelihood of misselling in the future”, says RBS head of retail bank Les Matheson.

He says: “We’ve been in a place as an industry having incentives for at least a couple of decades. I think it does take time to acclimatise to all the other changes we’re making . . . but I think it’s a big step.”

In 2012 RBS stopped paying staff on the basis of product sales and decided to pay cash incentives on top of their basic pay.

However, Matheson says “having variable pay can still be a distraction” from focusing on customers.

He says: “What’s important is that when the customer talks to a mortgage adviser, or an insurance adviser for example, that they are confident in knowing the outcome of the discussion will not affect their compensation.”