Non-financial misconduct incidents in the UK financial services sector rose substantially in the previous three years, a new report from the Financial Conduct Authority has revealed.
Reported incidents of bullying and harassment rose by 26% and discrimination by 23%, according to the data.
Incidents of violence and intimidation were notably higher among London market intermediaries such as insurance brokers.
Wholesale banks like Barclays PLC (LSE:BARC) and Standard Chartered PLC (LSE:STAN) (which were not specifically mentioned) had the lowest proportion of reported sexual harassment cases, but a greater proportion of reported discrimination cases compared with other portfolios.
Less than half of reported incidents resulted in disciplinary or ‘other’ actions, noted the FCA, with the majority of cases either being not investigated, determined as inconclusive, upheld but with no action taken or ongoing.
However, the majority of violence, intimidation and sexual harassment incidents led to disciplinary actions.
Illegal drug use, sexual harassment, violence and intimidation were most likely to result in a full dismissal.
The most common detection methods for non-financial misconduct were grievances or formal escalation processes (50%), followed by whistleblowing.
The most common type of misconduct across all sectors fell into the ‘other non-financial misconduct’ category. This includes misuse of alcohol, offensive language, misuse of expenses and breaches of firms’ policies and procedures.
While the figures suggest a worrying trend, the FCA noted that “a high number of incidents does not necessarily suggest a worse environment – it may in fact be an indication of a healthy speak up culture, and may reflect size and scale of a firm”.
Likewise, a low number of incidents “does not necessarily suggest a positive or improving environment”.
In September, insurance marketplace Lloyd’s of London, which has faced numerous high-profile incidents of non-financial misconduct, pledged to overhaul its framework for dealing with issues of poor conduct.