In the past, the FCA’s interest in organizational culture has largely been focused on preventing regulatory breaches, such as fraud and money laundering. However, there has been a noticeable trend towards wider cultural issues and the FCA’s role in changing the culture of the UK Financial Services industry to reflect national and global issues.
Key Priorities Highlighted
A recent speech by Sheldon Mills, Executive Director of Consumers and Competition in the FCA, highlighted three key priorities the FCA has set in respect of culture:
- Firstly, that culture and purpose, in the wake of the pandemic, are as important as ever.
- Secondly, that diversity and inclusion are key priorities for the FCA and it will be taking action to raise standards.
- And lastly, that climate change and sustainability is an area where the financial sector has a huge sphere of influence and the FCA expect firms, particularly those in the Investment Management sector, to drive meaningful progress.
This follows other activities focusing on culture, diversity and inclusion, including a discussion paper which covered aspects such as:
- The role of the FCA and other regulators,
- How the FCA should measure progress, including additional reporting requirements relating to diversity and inclusion, and
- How the FCA should drive change, through its culture and policies
A New Focus
Moving forward, we can expect to see further activities by the FCA in respect of cultural issues. For e-money and payments this is likely to focus on measuring and delivering greater inclusion and diversity both internally and for consumers.
Sheldon Mills wrapped up his speech by saying:
‘Firms with healthy cultures, cultures that are purposeful and safe, can deliver positive results for customers, employees and shareholders. And for society and the environment. That means leaders paying close attention to culture. Understanding and assessing it. And taking action.’
The FCA’s focus on culture in the Financial Services industry is gathering momentum. We will have to wait and see what the result of this look like for policies, requirements and the activities of financial firms, including e-money and payments. Get in touch today to find out more.