FCA launches whistleblowing campaign

The FCA has today launched a campaign to encourage individuals to report wrongdoing in financial services. The campaign, 'In confidence, with confidence' includes materials for firms to share with employees, and stresses the confidentiality processes in place to protect whistleblowers.

The watchdog said culture and governance remain among its key priorities, and firms are required to have effective arrangements in place for employees to raise concerns, and to guarantee these concerns are handled appropriately and confidentially – including a requirement for an appointed ‘whistleblowers’ champion.

Executive director of enforcement and market oversight, Mark Steward said: 'We want all whistleblowers to feel welcomed by us and to feel safe because of us.

“We listen to all whistleblowers and, if they shine a light on serious misconduct, we want to make sure we act responsibly. When whistleblowing works well it helps consumers, markets and firms and keeps everyone safe and that is our aim.”

Whistleblowers that report to the FCA will have a dedicated case manager. They can meet with the FCA to discuss their concerns and can receive optional regular updates throughout the investigation. Every report the FCA receives is reviewed and the FCA said it guarantees to protect individual whistleblowers’ identities if they wish to remain anonymous. This includes not confirming the existence of a whistleblower when making enquiries, unless legally obliged to do so.

Commenting on the announcement, Mark Turner, managing director at Kroll’s compliance and regulatory consulting practice, Duff & Phelps, said the campaign will be a success if it creates a safe space for employees to speak up.

“In nearly every instance when things go badly wrong, someone knows about it before it blows up. Whether the issue is fraud, aggressive accounting practices, bullying and harassment, excessive risk taking, there is likely one individual that is aware something is not right. Still, it is often in that individual’s best interest to keep quiet. Speaking up, when your own organisation doesn’t want you to, can be a career ending move.

“Current whistleblower protections don’t seem to be working. Indeed, the personal stories of whistleblowers can be harrowing. Many are ignored, unsupported or even left financially and mentally exposed. As a result, many whistleblowers are now turning to social media or platforms like ‘Truth Teller’ to voice concerns. This is not a good outcome for firms, as they have no control over what it said and how it is investigated. It is therefore in everyone’s interests for firms to have whistleblowing arrangements that are genuinely trusted, and can cope with all types of concern no matter what or whom they relate to. The reputational damage of not doing so, however tempting in the short-term, could be severe.

“The FCA’s campaign will be a success if it creates a safe space for employees to speak up, whatever the issue is, secure in the knowledge that their firm stands behind them. Individuals who speak up about wrongdoing should be championed both inside and outside their organisation. It is promising that FCA recognises that more needs to be done to reach this point, let’s hope that this time they can drive real change.”

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