The U.K. Financial Conduct Authority has published the findings from its non-financial misconduct survey. The survey, sent to 1,028 wholesale banks, brokers and insurance firms in February, aimed to examine how firms detect and handle non-financial misconduct incidents. It found that the number of allegations reported increased between 2021 and 2023. The FCA's findings include:
- the distribution of non-financial misconduct types varied by sector, although bullying and harassment (26%) and discrimination (23%) were the most reported types of non-financial misconduct across all sectors. There were also 41% of non-financial misconduct incidents reported in the "other" category;
- firms identified 50% of incidents through reactive routes such as grievances or similar formal processes, as well as other reporting routes such as whistleblowing;
- disciplinary or "other" actions were taken in 43% of cases; and
- the total number of confidentiality and settlement agreements signed by complainants fell over the three years surveyed, according to the data from the wholesale banks sector. However, the data from other sectors showed no clear trend.
The FCA expects firms, working with their trade associations, to use this benchmark survey data to reflect on whether their own processes, procedures and controls provide both robust detection and appropriate outcomes. The FCA then wants firms to discuss non-financial misconduct at senior management and board level. All firms must be fully compliant with their existing regulatory responsibilities and reporting requirements. Going forward the FCA plans to use the responses to the survey to inform its supervisory and policy work and will act where firms fail to adhere to the rules. The FCA also confirmed that it will not be publishing best practice or guidance to firms at this time but is reviewing the feedback received to its consultation CP23/20 on diversity and inclusion in the financial sector. It plans to publish the finalized policy in due course, including on how non-financial misconduct should be considered within its rules.
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