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NEW FCA WHISTLEBLOWING RULES HAVE SPURRED UK FINANCIAL SERVICES FIRMS INTO ACTION, BUT WORK IS REQUIRED TO ENCOURAGE ‘SPEAKING UP’, REVEALS NAVEX GLOBAL SURVEY

  • Nearly two thirds (65 per cent) of financial services organisations have implemented additional measures to improve their whistleblowing programme beyond the minimum FCA and PRA requirements introduced in September 2016
  • Results show that firms recognise the value of promoting a ‘speak up’ culture, yet only 3 per cent of organisations have experienced an increase in whistleblower reports

UK financial services firms have used the introduction of new regulatory requirements for whistleblowing and incident reporting in 2016 as an opportunity to elevate their reporting programmes beyond the minimum standards, with 65 per cent taking the opportunity to implement additional measures. However, there is still work to be done to promote a ‘speak up’ culture in financial services, with only three per cent of firms so far citing any increase in incident reporting.

Those are the key findings of a UK Financial Services Whistleblowing Regulation Survey released today by ethics and compliance software and services company NAVEX Global®. The report surveyed C-level executives and ethics and compliance professionals from banks, building societies, insurance companies and investment firms based in the UK, to provide insights into the impact of new whistleblowing regulations introduced by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in September 2016.

The study also found that 21 per cent of organisations have seen an improvement in employee behaviour and organisational culture since the new rules were introduced.

“It is encouraging to see financial firms taking a proactive approach to their whistleblowing and incident reporting programmes, and the survey findings suggest that the FCA rules have spurred a real commitment to promoting an ethical organisational culture in financial services, rather than simply a ‘tick-box’ exercise. This is underlined by improvements in employee behaviour and organisational culture that many organisations are now seeing”, said Andrew Foose, Vice President, Advisory Services, NAVEX Global.

“However”, Foose continued, “the small increase in cases of incident reporting since the regulations were introduced serves to demonstrate how much time and effort is still needed to convince employees to speak up. Financial organisations must build trust in their reporting programmes by putting strong mechanisms in place to protect reporters from retaliation. They need to demonstrate that they will take every report seriously and investigate them effectively. Employees should also have the option to report confidentially through web and telephone-based channels.”

The new rules on strengthening whistleblowing systems in the financial services industry came into force on 7 September 2016. Designed to improve professional standards in the sector and to promote a culture where employees are comfortable about ‘speaking up’ without fear of retaliation, the regulations include a requirement for firms to appoint a ‘whistleblowers’ champion’ and to put in place internal arrangements to handle all types of disclosure from all types of person.

Key measures that firms say they have introduced to go beyond statutory requirements include extending their whistleblowing process to also provide ethical guidance and help (24 per cent), additional channels for employees to report an incident (20 per cent), increased staffing (15 per cent) and increased financial resources to investigate and resolve whistleblowing reports (6 per cent).

To download NAVEX Global’s UK Financial Services Whistleblowing Regulation Survey, please click here. For useful tips, advice and examples of how to effectively implement and manage a whistleblowing and ethics reporting programme, please click here to download NAVEX Global’s Definitive Guide to Incident Management.