The FCA (Financial Conduct Authority) has announced several significant changes that will alter how whistleblowing claims are dealt with within the financial industry. These change affect both employees and employers of the sector.
One vital area of change soon to be introduced is for lenders and insurers to be monitored by financial industry watchdogs, with any case involving whistleblowing to be reported directly to these regulators should the case result in a loss for the business.
This new approach to whistleblowing within finance is intended to make potential whistleblowers feel confident enough to speak out about their claims while simultaneously acting as a reminder to the major banks that the FCA is cracking down on the widespread corruption of recent years.
Instances such as Barclays’ 2012 attempt to alter Libor Rates, which resulted in a £290 million fine for Barclays, has harmed public confidence in the financial industry.
The FCA has made it clear that the new changes are not the result of them trying to punish the banking sector for past wrongdoing but to instead strengthen its existing goals and values through plans that “build on and formalise the good practice already widespread in the financial services industry”.
The organisations that will be affected by the new rules include all banks, credit unions, deposit-takers and building societies that have assets of £250m or more. Insurers legally bound by the Solvency II directive will also be expected to abide by the new plans.
The whistleblowing changes will also require companies throughout the financial sector to appoint a “whistleblowing champion” within their organisation.
This person will be the first port of call for employees to express their workplace concerns, and these professionals will ensure that all information disclosed is done so in confidence without the threat of retaliation from employers.
An annual whistleblowing report
As part of the new whistleblowing legislation, the FCA released a join statement with the Bank of England’s Prudential Regulation Authority which explained that all businesses whose conduct will be affected by the alterations will be required to draft an annual report into whistleblowing occurring at their firm, which will then be presented to all company boards concerned.
This practice will require a senior management official to be present during the report’s construction in order to ensure every detail of it remains in line with official whistleblowing rules.
Whisteblowing cases on the rise
The changes introduced by the FCA have been implemented at a time when whistleblowing claims are on the rise across all areas of UK finance.
In 2014/15 a total of 1,240 whistleblowing cases were recorded within the sector. This is a 28% increase over 2013/14 when 1,040 claims were issued.
If such numbers are held in comparison to the results recorded for 2007/08, a period when a mere 138 claims were recorded, the major increase of UK whistleblowing cases is made painstakingly clear.
If all employees were made to feel more at ease in the workplace this already large figure would likely increase further.
There is speculation from finance industry experts and employment law barristers that these changes are just the beginning of greater alterations for whistleblowing laws across all areas of UK employment that could lead to employees being granted the right to receive payment for providing whistleblowing information, on condition that it leads to a successful claim at tribunal.
This policy of rewarding whistleblowers has long been protocol in the USA where the Securities and Exchange Commission offer financial recompense to employees, which has on many occasions led to major amounts of money being rewarded to whistleblowers.
All planned changes will begin in September 2016, by which time all UK businesses within the financial sector must have altered their business practice to conform with them.