FCA calls for transformation in financial services culture
The Financial Conduct Authority (FCA) has added its weight to growing calls for companies to pay close attention to their corporate behaviours, with the publication of a discussion paper on transforming culture in financial services
12 Mar 2018
The paper is a collection of 28 essays from academics and industry thought leaders that discuss what a good culture might look like, the role of regulation and regulators, how firms might go beyond incentives, and how to change behaviour for the better.
Jonathan Davidson, FCA executive director of supervision- retail and authorisations, said: ‘Culture may not be easily measurable but it is manageable. So firms can and should take responsibility for ensuring their culture is healthy for both their employees and customers, which can complement and support their business strategy.
‘We as a regulator have long gone beyond having the mindset that simply complying with rules is enough. However we don’t believe a one size fits all culture is the right way to go. So we want to promote a discussion and consensus on the essential features of a healthy culture and how firms, regulators, employees and customers can help deliver that culture.’
FCA says culture and governance is a priority, with a strong focus on the role of the individual as well as the firm. It cites the introduction of the senior managers and certification regime (SM&CR) is an example of this: it sets minimum standards for the behaviour of financial services staff and aims to promote a culture where senior managers take responsibility for identifying where harm might occur, and take action to prevent it. The regulator argues the SM&CR creates a formal link between the behaviour of individuals and the conduct of the firm.
The FCA says it would like all those with an interest in financial services to consider the issues covered in the paper and to engage in the debate about what constitutes a healthy culture, and how to promote it.
Report by Pat Sweet