The number of calls to the Financial Conduct Authority's (FCA) ‘whistleblower hotline' to report suspected malpractice in the financial services industry has jumped 23% in the last year, according to figures obtained by law firm RPC.
The FCA received 4,718 calls from staff at financial services firms to the hotline over the last year to August, - up from 3,834 calls the year before.
RPC partner Steven Francis said: "This significant jump in the space of just one year suggests a shift in attitudes within the financial services sector.
"Individuals working in financial services who suspect any wrongdoing by their colleagues are more aware than ever of their personal responsibility to report it.
"If they are an ‘approved person' by the FCA then they have a duty to act with integrity, which means they could be held personally accountable if they do nothing, even if they weren't involved themselves."
Francis added that the rise in whistleblowing suggests malpractice is more likely to be spotted and alerted, and doesn't necessarily mean that there is now far more wrongdoing than before.
Sanctions available to the FCA to combat misconduct include prohibiting firms or individuals from carrying on regulated activities, fining firms or individuals who breach FCA rules and bringing criminal prosecutions to tackle financial crime.
"Firms need to be alive to the risks and take a much more proactive approach to identify potential problems at an early stage to head off FCA involvement," Francis said.
He advises that in order to minimise the risk of damaging whistleblowing accusations, firms need to ensure that their internal reporting procedures are robust and fit for purpose.
"If someone makes a complaint to the whistleblower hotline, and it's not been flagged up internally, the regulator may be concerned as to why that is," he said.
"The FCA will take a very dim view of firms that don't have sufficiently robust whistleblowing policies, which set out clear and confidential internal reporting lines so that staff know exactly how to raise a potential issue, secure in the knowledge that it will be dealt with appropriately and seriously by senior management."
Cautious, Balanced & Dynamic Growth
Cowardly, boring or sensible
Latest news and analysis
‘Most significant’ upgrade since launch
Changes happening over coming months