On 29 November 2022, the FCA published a speech by Emily Shepperd, Chief Operating Officer and Executive Director of Authorisations, titled ‘From zeros to heroes: how culture in financial services can change for everyone’s benefit’. The speech was given at City and Financial Global’s 8th annual culture and conduct forum for the financial services industry.
Mind your language
The FCA expects senior leaders to nurture healthy cultures in the firms they lead. Cultures that are purposeful and that have sound controls and good governance. Where employees feel psychologically safe to speak up and challenge and where remuneration does not encourage irresponsible behaviour that can ultimately damage the business and wider markets.
The Consumer Duty will focus on minds and culture
The new Consumer Duty requires enormous cultural and operational change. Within the Consumer Duty, the FCA have asked firms to think about what a good outcome would be for their customers and to apply that consideration at every stage of producing and delivering a product or service. Furthermore, the FCA also highlights that the thinking starts at board level and have requested that there is a Consumer Duty champion on every board.
Other tools to embed positive culture
Another tool includes the FCA’s Early and High Growth Oversight support, which aims to help new firms to embed the right steps from the start, soon after they have gained authorisation. It also provides support to those new firms that are looking to scale up.
Furthermore, the FCA has recently completed a study into diversity and inclusion across a range of organisations and found that firms were focussed in improving representation at senior level but this dropped off at mid and junior level. The FCA expects firms to collect data on the diversity of their staff, actively monitor it with interest and take bold action where needed, paying attention as to where it intersects.
Fostering an innovative culture
The FCA wants to support industry as it draws on new tools, like artificial intelligence, to analyse the colossal amount of data they hold. Done well, it can mean better, more accurate pricing and products better suited to consumer needs.