Barclays is scrapping commission-based sales targets for frontline staff and will pay bonuses purely on customer satisfaction.
From 1 December, all 18,000 branch and call centre staff will have no commission or incentives based on products sold and bonuses will be based wholly on customers’ views about the level of service.
Chief executive Antony Jenkins has said the move is about regaining customers’ trust.
The announcement comes after the City watchdog recently said it would look to introduce new rules if the financial sector does not address the use of incentive schemes, which it said were driving staff to mis-sell products in order to receive a bonus.
The industry has already put £10 billion aside to pay back customers who were mis-sold payment protection insurance (PPI), in what has become the biggest consumer mis-selling scandal regulators have ever seen.
The Financial Services Authority (FSA) has been investigating taxpayer-backed Lloyds Banking Group over huge sales bonuses to frontline staff.
The FSA recently reviewed 22 firms’ financial incentive schemes and found that Lloyds’ failings were “so serious” that it was referred for further investigation which could ultimately see it face a penalty.
FSA managing director Martin Wheatley, who will become chief of the Financial Conduct Authority when it takes control of financial regulation next year, said most of the incentive schemes it saw were likely to drive people to mis-sell to meet targets.