Covid-19 Pandemic presents challenges for us all but whistleblowing is a key weapon
Last week, it was revealed in data obtained from a Freedom of Information request, by investigations firm Kroll, that whistleblower reports to the Financial Conduct Authority have risen by 35% in the past 12 months. Some people will be shocked by these figures but I, personally, believe this is a very positive cultural change for individuals working in financial services. It suggests that more individuals now have the confidence to speak up and report unprofessional conduct/activities. The Institute’s “Speak Out” initiative [members can access the link from their member homepage] was launched in 2018 and it is the only one which signposts our members on whistleblowing through a completely anonymous digital solution. Since its launch, Speak Out has provided members with guidance and support across a range of issues, not only whistleblowing, but the many workplace issues affecting our members. With respect to whistleblowing issues, we signpost our members towards Protect and so I am pleased to share with you a blog from Brucak Dikmen, Adviser at Protect. This blog post details the effects of Covid-19 and increased remote working on whistleblowing in financial services, and offers advice on what firms should be doing during these unprecedented times to strengthen their whistleblowing policies and procedures.
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Joanne Murphy
Chief Operating Officer
Not since WWII has there been a crisis to cause such global disruption. As the COVID-19 pandemic continues to shape the way we live and work, casting a shadow of uncertainty across society in every corner of the world, whistleblowing remains ever more relevant.
So far, whistleblowing in the health sector has rightly been dominating headlines, however this should not overlook novel risks which may surface within financial services. As working remotely becomes the norm for many, the risk of a trade-off between service continuity and compliance with regulatory standards can lead to a breach of those standards, or even wrongdoing stemming from the reduction of compliance monitoring.
The Financial Conduct Authority (FCA) has recently called on financial services providers to ensure they have tighter systems in place to manage the impact of the pandemic on their operations, and adapt to the needs of their consumers during the crisis. This comes amidst a 400% increase in reported fraud, as well as a spike in COVID-19 related disputes with the Financial Ombudsman Service. The chaos of crisis creates a gap for internal misconduct to take place, which is why financial institutions must take care to put consumers' interests at the heart of any decision-making, and ensure they take steps to manage internal risks and any risk to their customers in doing so.
This makes it paramount to ensure that firms' existing whistleblowing arrangements are robust, and the importance of speaking-up remains more important than ever. One of the challenges caused by the pandemic has been adapting to new changes within our working lives. This has meant implementing and adjusting to remote working for most firms in a short space of time to ensure business as usual for services. For instance, Insurers have now turned to e-trading platforms, and even at Protect, training for organisations is now being provided virtually.
As whistleblowing channels within firms should remain operational, remoteness may create difficulties around the practicalities of traditional face-to-face exchanges as a channel for raising concerns. Additionally, whilst few global events can be compared to the one we currently face, recession and the threat of redundancy will undoubtedly lead some employees to question whether speaking-up is a risk they are prepared to take in fear of being reprimanded by their employer. To overcome this challenge, firms must ensure that staff are being encouraged to speak-up and that they can do so in confidence without fear of repercussions.
Whistleblowing is the best early-warning system for organisations to mitigate risk. Without this, the cost of organisations not dealing with concerns that present even the slightest risk of malpractice can be detrimental.
What Should Organisations Be Doing?
- Employers should be taking steps to ensure whistleblowing is still high on the agenda, and continue to follow FCA guidance in ensuring they have effective arrangements in place.
- Senior figures and management should be leading the process of fostering a positive speak-up culture, by ensuring staff feel supported and are confident concerns will be handled. As most concerns are raised to a line manager in the first instance, training for management on how to handle whistleblowing concerns is crucial. Protect is currently offering online Open Training Masterclasses for organisations.
- Now is a good time to raise awareness on what whistleblowing is; the procedures around how and where to raise concerns and seek independent advice from organisations like Protect.
- Organisations should also review their whistleblowing policies and adapt arrangements, if necessary, to changed working conditions by taking remoteness into consideration to ensure that staff can blow the whistle through a variety of mediums.
Protect has developed its unique Benchmark 360 tool which incorporates best practice and FCA whistleblowing rules to help organisations identify gaps in arrangements. The tool also provides an action plan on how to improve effective governance, operations and staff engagement.
The pandemic is causing many challenges and uncertainty amongst all organisations; however, it also provides a ripe opportunity for firms to test the strength of their existing arrangements and make improvements to ensure an overall robust framework during the crisis and beyond.
Burcak Dikmen, Adviser at Protect