Exclusive: Banks cleaning up their act as City sees steep drop in bullying and sexual harassment
Banks, insurers and other financial services firms have come under pressure from the City watchdog, the Financial Conduct Authority (FCA), in recent years to crack down on personal misconduct by individuals in regulated firms, and it seems these efforts are starting to pay off.
Morning Wire can reveal this morning that London’s financial services space is experiencing a steep drop in bullying and sexual harassment reports as banks and other finserv players are actively addressing any toxic workplace cultures.
In fact, the number of whistleblower reports made to the FCA about personal non-financial misconduct in the financial services sector dropped 11 per cent in the last year from 603 in 2020 to 537 last year, Square Mile-based employment lawyers told Morning Wire today.
Whistleblowing reports made to the FCA on personal misconduct include claims over whether an individual is fit to do their job and reports of sexual harassment.
Controls and fines
The FCA has made it clear that firms need to have appropriate systems and controls in place to uphold a positive working environment and ensure their employees act with personal integrity.
Where senior managers have been in breach of the standards expected, the FCA may issue fines and even ban individuals from working in the industry.
Managers are also required to have a strong handle on conduct in the areas for which they are responsible.
Senior managers can face penalties if they fail to take action in response to inappropriate behaviour.
| Allegation Subject | 2019 | 2020 | 2021 |
| Fitness & Propriety | 443 | 384 | 353 |
| Culture of organisation | 219 | 211 | 184 |
| Sexual Harassment | 13 | 8 | 0 |
| Total | 675 | 603 | 537 |
It is widely believed that broader shortcomings in corporate culture within the banking sector contributed to the financial mismanagement and excess risk taking that led to the Global Financial Crisis.
Lawyers at Fox & Partners, an employment and partnership law firm, explained to this paper that the drop in the number of personal misconduct reports is likely partly due to action taken by firms.
Training and messaging
Many have introduced mandatory internal training and leadership messaging to create a culture in which inappropriate behaviour is called out.
Firms may also assess staff against a broad spectrum of indicators, ensuring appropriate escalation procedures are in place to help investigate claims.
Catriona Watt, Partner at Fox & Partners, stressed that “the drop in the number of personal misconduct reports shows action taken by financial services firms to improve workplace culture is starting to yield results.”
“Firms are increasingly aware that individuals within their organisation failing to meet standards of personal conduct pose a threat to their corporate reputation.”
City lawyer Catriona Watt
“This has prompted an emphasis on training staff to be able to identify and call out misconduct,” Watt explained.
“As employees return to their offices in greater numbers, we will see whether the training firms have put in place to create appropriate behaviour continues to be effective.”