I think regular readers are well aware that one of my pet hates is any statement that includes the line, “we are a client-centric organisation” or “we are led by our customers”.
Yes, we all need customers, otherwise most major banks wouldn’t be making more than $2 billion per year in FX revenues (some obviously make much more); but seriously, have we not all had enough of these trite comments? Has this mentality not got several players into enough trouble?
I am told that some recent cases of traders and salespeople being dismissed or suspended are due to efforts to play with the market around customer orders, not specifically the Fix. Strange events in the EUR/PLN market led to a couple of suspensions, however sources familiar with the matter tell me the traders concerned were acting upon the instructions of their customer.
Equally, a dismissal last year was related to an indiscretion on the part of a trader who was apparently instructed by a senior member of staff to “look after” after the customer and “tell them what they need to know”.
I raise this because increasingly it seems that some of those suspended or dismissed are going to be leading their defence with the “I was only following orders” line. As I recall, the last group to try this defence didn’t get very far in the late 1940s, and I don’t expect this to succeed either – after all, we all know right and wrong and individual responsibilities play a huge role in our day-to-day work. If someone tells you to do something you know is wrong, the tough – but correct – option is to refuse and escalate the issue.
This issue highlights the perils of being too attentive to your customers. Some do not know what is best for them and more importantly some know what they ask is wrong but still ask. I’ll always remember a salesperson’s (and colleague at the time) comment from a long while ago: “All customers want to know everything, but they don’t want anyone knowing what they are doing”. In other words, we are all for transparency, as long as it doesn’t involve my business!
I suspect that the spate of dismissals and suspensions related to the Fix and these other incidents will lead to a more realistic relationship between bank and customer. It is already evident in emails the banks have been sending to customers explicitly stating they may deal against them during and ahead of the Fix, and increasingly I am hearing from customers that banks are less willing to talk tactics with them.
This is not necessarily a good thing, for a lot of customers need help – it’s called execution advisory – but at least it reflects a more realistic view of the world. The headlines continue to focus on the activities of traders but this is, to an extent, shielding the big story. The role of the salesperson is changing irrevocably – they have to be incredibly careful when providing market colour, to the extent that more and more prefer not to.
This means there are less reasons to talk to the customer, which is never a good thing if you’re in that kind of role, and when interaction takes place it is on a completely new, and bland, level. Quite simply, salespeople will only be able to deliver the kind of content over the phone that clients can pick up from multiple online sources, including the banks’ single dealer platforms.
When it comes to the alleged activities of those traders dismissed and suspended the answers are pretty clear cut. They either broke rules they knew existed or they didn’t. For the salespeople, the future is much less clear cut – and possibly the most dramatic shift is going to be that they will now have to say “no” to customers, possibly for the first time in their careers.
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