The financial regulator, the Financial Conduct Authority (FCA), has published new rules about whistleblowing, to build on and formalise the established good practice already widespread in the financial services industry. Whistleblowing mechanisms allows bank workers, for instance, to report suspected wrongdoing at work by offering confidentiality to those speaking up.
Adequate whistleblowing policies in place
"Whistleblowers play an important role in exposing poor practice in firms and they have in the past few years contributed intelligence crucial to action taken against firms and individuals. It is in the interests of the industry and regulators alike that wrongdoing is identified and addressed promptly," Tracey McDermott, acting FCA chief executive, said in a statement.
"For individuals to have the confidence to come forward, it is vital that firms have in place adequate policies on dealing with whistleblowers and that a senior manager takes responsibility for overseeing these policies."
Banks, insurers and building societies have until September 2016 to comply with new rules.
Under new whistleblowing rules, financial companies have to:
● Appoint a senior manager as its whistleblowers' champion
● Establish internal whistleblowing arrangements able to handle all types of disclosure from all types of people
● Put text in settlement agreements explaining that workers have a legal right to blow the whistle
● Tell UK-based employees about the FCA and PRA whistleblowing services
● Present a report on whistleblowing to the board at least annually
● Inform the FCA if it loses an employment tribunal with a whistleblower
● Require its appointed representatives and tied agents to tell their UK-based employees about the FCA whistleblowing service
"These rules are designed to build on and formalise examples of good practice already found in parts of the financial services industry and aim to encourage a culture in which individuals working in the industry feel comfortable raising concerns and challenge poor practice and behaviour," McDermott added.
Rising whistleblowing disclosures
There were 1,340 whistleblowing disclosures recorded for the financial year 2014-2015, up 28% on 2013-2014 when the FCA recorded 1,040. These figures are a far-cry from the financial crisis of 2007-2008, when only 138 were recorded by the FCA, then called the Financial Services Authority.
In June, a survey carried out by Public Concern at Work, a whistleblowing charity, revealed that only 66% of financial services workers raised their concerns internally at the first attempt between 2006 and 2012. The report also showed that 35% failed to do so at the second attempt if their concern was not resolved on the first occasion.