The number of allegations of non-financial misconduct reported to financial services firms increased between 2021 and 2023.
A survey by the FCA of 1,028 firms, looked to better understand how regulated wholesale financial services firms were recording and managing allegations of non-financial misconduct, such as bullying, sexual harassment and discrimination.
According to the City watchdog, a higher number of complaints could indicate a healthy culture where people felt they could speak up, whereas a low reporting rate may have indicated the opposite.
In the three years covered by the survey, bullying and harassment made up 26 per cent of recorded concerns with discrimination making up 23 per cent with both being the most recorded.
However, there was another large group of concerns which made up 41 per cent, which the FCA said indicated how difficult it was to categorise issues of personal misconduct.
According to the data, half of firms used reactive routes to identify ‘incidents’ such as grievances or similar formal processes and through alternative reporting routes such as whistleblowing.
Disciplinary or ‘other’ actions were taken in 43 per cent of cases and in the remainder the FCA saw a range of other outcomes.
These included the cases either not being investigated or unable to conclude, not upheld, upheld with no other action, or were ongoing.
According to the regulator, misconduct such as violence and intimidation, more often resulted in disciplinary actions compared to other types of misconduct, such as discrimination.
The total number of confidentiality and settlement agreements signed by complainants fell over the three years surveyed, from the wholesale banks sector, with data from other sectors showing no clear trend, the FCA reported.
It also found some relevant policies, like whistleblowing and disciplinary policies, were not in place at all firms surveyed.
Sarah Pritchard, executive director of markets and international, said: “We want this data to support financial firms by providing their management teams and boards with an opportunity to consider if they stand out, and, if so, why that might be. The data requires context and careful interpretation. But in being transparent we hope financial firms can benchmark themselves against their peers.
“Healthy workplace cultures are essential across all the markets we regulate – where non-financial misconduct is allowed to persist it can undermine trust and confidence, and create a culture where wrongdoing goes unchallenged, causing harm.”
CII to write to members
In light of the survey, the CII has said it will write to members emphasising the importance of adhering to the Code of Ethics.
The professional body called on members and the wider insurance profession to uphold the highest standards of behaviour.
Matthew Hill, chief executive of the CII, said: “The FCA’s survey results make for uncomfortable reading, but equally highlight an opportunity for our professions to make a real difference.
“The CII supports what the regulator is seeking to achieve, professions in which everyone can thrive, regardless of their background, and workplaces that are conducive to professional success by eliminating conduct and behaviours that can stifle, harm and obstruct careers.
