* Watchdog sees progress in ending poor sales practices
* FCA says won't make further rule changes for now
* Says too early to say if culture at banks changing
By Huw Jones
LONDON, March 4 (Reuters) - Some of Britain's banks arestill offering their staff pay incentives that could triggermore mis-selling of financial products, the country's marketswatchdog said on Tuesday.
The Financial Conduct Authority (FCA) said significantprogress had been made in stamping out poor selling practices,but found around one in 10 of the companies it examined stillhad risky sales practices.
The issue of mis-selling remains sensitive in the wake of aseries of scandals. UK banks have for instance set aside morethan 20 billion pounds ($33.4 billion) to compensate customersfor mis-sold insurance on loans such as mortgages.
The FCA fined Lloyds Banking Group Plc 28 millionpounds last December for the way it encouraged staff to sell 2billion pounds of products that customers may not have needed.Incentives included a change to win 1,000 pounds, known as a"grand in your hand". Another was called the "champagne bonus".
Britain's regulators published a review of selling practicesin September 2012 and on Tuesday unveiled results of follow-upchecks that looked at 400 firms, nearly 800 incentive schemesand 12 company visits.
FCA Chief Executive Martin Wheatley said it would take timeto see if improvements seen so far become part of a genuinecultural change or whether other pressures put on staff replacesales incentives with the same harmful effects.
The watchdog's follow-up work found banks were not checkingfor spikes in sales by individuals, which can be a sign thatpoor sales practices are being used.
Face-to-face sales conversations were also being poorlymonitored in some cases and some firms were failing to recognisethat pay wholly linked to sales increases the risk ofmis-selling.
However the FCA was not planning any further regulation forthe time being. "Given the progress made, we are not proposingany changes in our rules at this time but financial incentiveswill remain on our agenda in 2014," the watchdog said in astatement.
The FCA was launched in April 2013 with a remit to protectconsumers after several mis-selling scandals spanning years,from endowment mortgages to pensions.
In April it will also start supervising thousands ofconsumer credit firms and will be checking their salespractices.