Reports of non-financial misconduct in Britain's financial services industry have increased by almost 60 per cent over three years, with bullying and discrimination emerging as the most common complaints, according to a comprehensive regulatory survey.

The Financial Conduct Authority (FCA) found that reported incidents rose to 2,347 in 2023 from 1,363 in 2021, after surveying more than 1,000 banks, insurers and brokerages about incidents ranging from whistleblowing to violence and intimidation.

Bullying and harassment accounted for 26 per cent of complaints, while discrimination made up 23 per cent of recorded concerns. However, the largest category was "other" at 41 per cent, highlighting the challenges in categorising personal misconduct.

Sarah Pritchard, executive director of markets and international at the FCA, said: "Healthy workplace cultures are essential across all the markets we regulate – where non-financial misconduct is allowed to persist it can undermine trust and confidence, and create a culture where wrongdoing goes unchallenged, causing harm."

The survey revealed significant governance gaps, with almost 40 per cent of London's market insurers and intermediaries employing at least 250 staff lacking formal structures to handle non-financial misconduct cases. Moreover, 44 per cent of insurers did not report such cases to their boards at all.

Meg Hillier, chair of the parliamentary Treasury Committee, expressed concern about the findings: "During the last parliament, previous members of the Treasury Committee found a shocking prevalence of sexual harassment and bullying in the finance sector, and a culture which is holding back women. On the surface, these latest findings seem to show that far from the City dealing with these issues, it may even be going backwards."

The survey also found that financial penalties for misconduct were rare, with adjustments typically only affecting unvested variable pay. The number of confidentiality agreements signed by complainants decreased from 87 to 51 last year, while hiring of staff with recorded incidents of misconduct fell from 10 cases in 2021 to five in 2023.

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