Banking exec: Diversity regulations could ‘dumb down’ corporate efforts already underway
A LEADING BANKING executive has warned regulator proposals designed to increase diversity, equality and inclusion in the City could in fact “dumb down” work already being done in financial services.
Tracey McDermott, who served for almost a year as the City regulator’s interim CEO and is now Group Head of Conduct, Financial Crime and Compliance at Standard Chartered, told the Following the Rules podcast that the regulator could run into what she called the ‘levelling up problem.’
“One of the challenges when you’re trying to drive industry movement is that you need to make sure that you’re not creating something which is so standardised that it actually dumbs down what the best firms are doing or makes it a record-keeping exercise rather than a genuine attempt to actually boost diversity,” she said.
The Financial Conduct Authority and the Prudential Regulation Authority proposed that firms are obliged to develop diversity and inclusion strategies, set targets to address under-representation and report and disclose certain data.
McDermott warned that whatever the FCA imposed would need to be flexible enough that firms who have developed their own diversity policies prior to regulation are able to meet the new regulations without rewriting their own work, and that the policies had global consistency.
“What you put out there (must be) flexible enough to enable different firms to adapt their existing programmes… to fit with what the regulator is trying to achieve without seeking to mandate a culture or an approach which is driven completely by the regulators,” she added.
The Following the Rules podcast is presented by financial journalist Lucy McNulty and can be downloaded from the usual platforms.