Culture and non-financial misconduct survey

On 25 October 2024, the FCA published the findings of its most comprehensive survey to date relating to culture and non-financial misconduct (NFM).

In February 2024, the FCA sent the survey to approximately 1,000 regulated wholesale financial services firms. The survey consisted of a series of questions requesting high-level statistics relating to NFM related incidents in 2021, 2022 and 2023.

Key findings include:

• For the three-year period, the number of reported NFM incidents increased significantly. The FCA acknowledges that this may be in part be because of the COVID-19 pandemic.
• Bullying and harassment (26%) and discrimination (23%) were the most reported types of NFM across all sectors. 41% of NFM incidents were reported in the category, "other".
• Across all sectors, reactive processes such as grievances or more formal processes accounted for most of the incidents that firms had identified. The importance of whistleblowing was underscored, with whistleblowing accounting for around 30% of the incidents identified in wholesale banks. Monitoring and surveillance tools accounted for a relatively small number of incidents.
• In 43% of cases, disciplinary or "other" actions were taken including mediation and management training or coaching. The remainder of cases saw a range of outcomes: cases were not invested, not concluded, not upheld, upheld with no further action, or investigations were ongoing.
• Discrimination accounted for the highest percentage of incidents being concluded by a settlement or confidentiality agreement (23% of cases across all sectors).

The responses to the survey will inform the FCA in its ongoing supervisory work and its engagement with firms. Although it has committed for now to not publish best practice or guidance to firms, the much-awaited policy statement in response to its consultation on diversity and inclusion in the financial sector (CP 23/20) is expected to be published around year end.