Some 66 per cent of financial services and insurance employees would use AI to help detect non-financial misconduct.
A study by communications data and intelligence firm Smarsh, found 59 per cent of employees had either witnessed or personally experienced non-financial misconduct in their organisation.
This comes after the FCA found the number of allegations of non-financial misconduct reported to financial services firms increased between 2021 and 2023.
The City watchdog plans to implement new rules and expects firms to have effective systems in place to identify and mitigate non-financial misconduct related risks.
Most respondents (89 per cent) of the survey, were supportive of these potential rules and regulations, with 94 per cent saying it was “very important” that non-financial misconduct was identified and responded to in their workplace.
However, 63 per cent of respondents were not completely confident their organisation's current communication monitoring systems could effectively detect instances of misconduct.
Paul Taylor, vice president of Smarsh, said non-financial misconduct had been brought to the forefront in recent years with many industries working to transform their attitudes to tackle it.
“The City must now ask itself how it can take the necessary steps to follow suit. The first step is to establish effective systems that can identify non-financial misconduct instances, particularly those that occur over workplace communications channels.
“This communication data is already being archived and used for other regulatory and compliance purposes, so it is a logical starting point. The next step will be to leverage AI to pinpoint misconduct at scale, given the variety of misconduct scenarios and the volume of data accumulating from daily firm communications.”
The research also found there was not only a potential incoming regulatory requirement to address misconduct, but also not doing so could impact a firm’s ability to attract and retain staff.
Some 78 per cent said knowing non-financial misconduct was being identified and responded to played a part in whether they would stay at their current organisation.
This view was held across the board for both male (79 per cent) and female (75 per cent) employees.
However, it was slightly more important for younger employees (77 per cent of 18–24-year-olds) compared to 69 per cent of those over the age of 35.
Tom Padgett, president of enterprise at Smarsh, added: “There is an opportunity for firms to leverage the data they are already storing for recordkeeping and detection of financial crime, to also help identify non-financial misconduct instances that threaten organisational culture.
“Financial services and insurance firms can identify these instances at scale by deploying purpose-built AI to help them do exactly this in an evolving regulatory environment.”
alina.khan@ft.com
