Money Insider: Co-op service move should be a blueprint for banking

The message that consumers are fed up to the back teeth with the tedious and relentless sales pressure they face every time they contact their bank may at long last be getting through.

This week, the Co-operative Bank announced details of its new bonus scheme pilot, whereby staff in branches and customer call centres will have their sales targets removed and be measured and rewarded purely on the levels of customer service they provide.

It's a huge culture change for the financial services industry, and a refreshing new mindset, albeit long overdue.

The level of trust and confidence in our banks is at rock bottom, and following years of dissatisfaction, mis-selling scandals and record levels of complaints, the industry needs to take a long, hard look at itself and recognise that it can no longer treat customers as cash cows.

Aside from the onset of the banking crisis, the last few months have been some of the most turbulent in the history of UK financial services.

The major computer problems at RBS and the sale of unsuitable and complex products to small businesses were serious issues in their own right, but they almost paled into insignificance when the manipulation of Libor was uncovered.

The forthcoming inquiry into the banking industry needs to look at the culture, the standards and conflicts of interest which have driven the banking sector to the low point where it sits today.

The issue is wider than just the banks. The City demands multibillion-pound profits to be delivered year in, year out, otherwise the share price takes a hit, so it's little wonder that excessive bonuses are on offer for those who deliver these levels of profitability, no matter what the cost.

Whilst the five and six-figure bonuses are reserved for those working in the investment banking sector, it is the frontline branch staff who take the brunt of customer anger and frustration on a day-to-day basis.

It's those same branch staff who until now have been subject to demanding monthly sales targets in order to achieve financial bonuses, or face the threat of being put on a performance improvement contract if their sales figures aren't up to scratch.

We need to get back to the days when you could go into your branch with a query concerning your account and get it sorted without being given the hard sell.

At the moment you can barely set foot in the door without someone trying to "upgrade" you to a packaged account or suggest you have a "financial review" with the in-branch financial adviser.

The move from the Co-operative Bank should be applauded, and although it is currently only a pilot, it shows that the bank's hierarchy have realised that the way business is transacted in bank branches and call centres needs to radically change if they are to get customers back onside.

If you give a customer excellent service then the trust returns, the bond becomes stronger, and they will buy your products without the need for any arm-twisting.

Let's hope the Co-op rolls this new initiative out across its entire operation and throws down the gauntlet to its high-street rivals.

New rewards deals from Barclaycard

Following a relatively quiet couple of years in the credit card rewards market, the sector has really sprung to life in 2012, with Barclaycard reacting to recent best-buy offers from Sainsbury's Bank and Capital One with two new deals of its own.

Barclaycard Cashback is much more straightforward than cards on offer from some of its rivals. There are no tiers whereby you earn greater rewards the more you spend, and there are no caps on the amount of cashback you can earn either. You simply earn 2 per cent back on your five biggest purchases each month, and 0.5 per cent on all other spend. For the first three months the deal is enhanced and you'll earn 6 per cent cashback on your five biggest purchases each month during this introductory period.

The Barclaycard Freedom Rewards card enables you to earn points that you can redeem at around 70 retailers, including Marks & Spencer, iTunes and Amazon.

There are plenty of people who don't need a 0 per cent balance transfer card but pay their card off in full every month, so for these people it's another opportunity to get something tangible back in return for their custom.

Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk