Building diverse and inclusive cultures in financial services

Diversity has been on the agenda in financial services for some time, with high profile target-based initiatives such as the Women in Finance Charter, the Race at Work Charter and the Social Mobility Task Force leading to some measurable progress. Nonetheless, it is widely recognised that a lot more work in these areas needs to be done and that importantly, the scope of ?diversity? needs to be intersectional.

Momentum for change has become increasingly evident with the events of the past year catalysing the need for it. A joint Discussion Paper from the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Bank of England (BoE) highlights this necessity. The FCA has indicated that it will be implementing the inclusion of diversity and inclusion into how it regulates, building upon existing work on vulnerable consumers and the proposed Consumer Duty.

Over 40 Chief Compliance Officers (CCOs) from across UK Finance were joined by Olivia Fahy, Head of Culture from TCC Group in the most recent UK Finance CCO Member Network meeting to discuss these challenges and the expectations from the regulator on the horizon.

The joint discussion paper states that the regulators will be considering regulatory reporting on diversity data. Firms shared their current experiences in collecting such data and highlighted the associated challenges. Issues arose with the voluntary nature of this data collection with employees highlighting concerns over data protection. Firms noted the importance of creating a culture in which employees feel comfortable with this kind of data collection, and the importance of language when having these discussions or creating the surveys.

One key takeaway from the session was the significance of building and growing diversity and inclusion programmes with a dual approach. The regulators have set out clear definitions for the two within the discussion paper highlighting the importance of tackling them as separate entities and that without one, the other cannot work. An inclusive culture needs to be built into organisations for diversity to flourish. Creating one without the other is arguably not a sustainable model.

Looking ahead towards a hybrid working environment, firms stressed that diversity and inclusion must be integral to building these new models, ensuring employees are fully supported at all levels of an organisation. Company culture should be embedded with diversity and inclusion considerations going forward and firms are recognising the increasing regulatory requirements, particularly from a data perspective within the space.

To join us at the next CCO Member Network meeting, please contact the UK Finance Network team on networks@ukfinance.org.uk .For more information about how TCC Group can help with the practical changes regarding improving diversity and inclusion strategies please contact Olivia Fahy, Head of Culture on Olivia.Fahy@tccgroup.