Many employees within the financial sector find themselves slowly but surely returning to the unfamiliar four walls of the office. But will they be returning to the same working environment?
Neta Meidav believes otherwise. Neta is the Co-Founder & CEO of Vault Platform; a prominent trusttech that specialises in the provision of ethics-enabling workplace technology. In this guest-authored piece for The Fintech Times, Neta dissects the culture that plagued the pre-pandemic workplace, and discusses how the future of the employee-employer relationship can become far more ethical with the use of suitable HR frameworks.
In recent history, we have seen heavy-handed treatment towards whistleblowers in the financial services sector, but there is one noteworthy example, Barclays.
Boss Jes Staley harnessed the full firepower of the organisation’s security team to try and uncover the identity of an individual who had made allegations about a former colleague “Mr. Staley” had recruited to work at the bank, as well as the chief executive’s decision to hire him.
Apart from riding roughshod over the presumed confidentiality of the process, the response had wider repercussions – seemingly deterring other potential complainants from following suit as the bank’s whistleblowing cases dropped by almost a third the following year.
Fortunately, voice silencing and inertia have become much less palatable in the wake of employee activism amid a cultural zeitgeist that is seeing a more empowered workforce demand higher standards of its leaders and colleagues, transforming attitudes to speaking up. Accountability has become the Holy Grail and pressure is rife across all sectors, but especially acute in a financial sector that has never quite recovered reputationally from the 2008 credit crisis dogged by failures of corporate culture, conduct, and governance.
From customer protection lapses, rogue traders to anti-money laundering deficiencies, an estimated $350 billion to $470 billion in penalties (including fines and litigation charges) has been paid out by the banking industry in response to conduct-related matters since the crisis, evidence that what has all too often been readily dismissed as ‘soft people’ issues, can have a significant impact on the bottom line.
It’s why it is in everyone’s interest to drive reform in conduct and culture, to root out wrongdoing, heighten expectations and hold senior management to account – essentially demand much more from them as leaders to do the right thing to ensure positive ethics filter down through the ranks. To this end, The Financial Conduct Authority (FCA) has set out its intent with a new campaign, reminding firms of the importance of governance and fostering a culture in which employees feel able to have a voice and can be confident their concerns will be acted upon.
Meanwhile, the imminent EU Whistleblowing Directive will see firms of more than 250 employees required to have misconduct reporting systems, the underlying principle being to afford greater protection to the individual raising a concern.
Against this backdrop of greater scrutiny, we can’t overlook the unique conditions of the post-Covid working environment and the implications this presents. With home working and less employer/office visibility, there is potentially greater opportunity for rogue behaviour and risk. As such, the priority of improving internal employee reporting processes and policies by implementing the best possible tools that can also encourage timely and proactive interventions before issues escalate has never been higher on the agenda.
Not surprisingly, attention is turning to these reporting mechanisms. Discreet mobile apps that combine the human touch with technology are one answer; we need approaches that delve deeper into internal cultures and behaviours rather than simply digitising old methods and relying on software that simply scans and alerts to bad practice.
If we accept that one of the most prevailing barriers to raising concerns and achieving effective resolutions has largely been employee discomfort – the knock on the door of HR, a perceived (or real) lack of discretion, and the sense of acting alone and putting your head above the parapet – a progressive system should address this by shifting control of the process from individuals to fostering a more collective approach from the outset. Identifying repeat problems by providing a digital escrow and connecting the dots on repeated patterns can be the game-changer. We also know that data is more powerful when it is big data – collated and integrated to uncover trends and patterns as opposed to isolated observations that are easy to overlook.
Both points are crucial; today’s employees expect to have more control than in the past and today’s leaders need to show the willingness and transparency to provide it. Furthermore, we have seen with crystal clarity, the power, and progress that comes from a collective voice and shared experience when it comes to impact and achieving sufficient visibility on misconduct.
For instance, how did 700 whistleblowers reporting the sales tactics at American Multinational Wells Fargo get so easily ignored, when the financial services company fraudulently opened as many as 1.5 million bank accounts? The prevailing consensus was a lack of focus with reporting leading to a tendency to lump together important issues with the more trivial ones. This led to speculation rather than hard evidence and a muddled disparity that chipped away at the credibility of the case.
In conclusion, we have witnessed time and again that employees are standing up to wrongdoing in the workplace, however, in too many scenarios they have been let down by the inadequate reporting framework that their employers have in place. Transparency and accountability are the most important factors that financial services firms must get right before they can establish a culture of trust, integrity, and high ethical standards within their organisation.