FCA whistleblowing reports in decline since pandemic

Whistleblowing reports submitted to the FCA decreased significantly in the aftermath of Covid, but are starting to rise again in 2022, according to a Freedom of Information (FOI) request from instant cash payment service, Funanga.

The data shows that whistleblowing reports to the FCA declined significantly during the pandemic, down 13% in 2021 compared to 2019.

Positively, reports of wrongdoing have started to rise again in 2022. Reports in 2022 have risen by 6% compared to the same period in 2021. Anonymous reports have also risen by a massive 53% in 2022.

The most common type of wrongdoing reported to the FCA is about fitness and propriety.

Of the 108 reports received in June 2021, only five had been resolved with significant action taken against the company six months later.

Funanga says there is approximately a 50% chance of the FCA taking significant action against a company reported to them within two years.

Jens Bader, Funanga CEO, commented: “The last 36 months have been a petri-dish for increased money-laundering, financial scams, fraud, and other forms of non-compliance. Meanwhile the FCA launched a new whistleblowing initiative in 2021 'In confidence, with confidence' to encourage more reporting of wrongdoing from employees in the financial services sector. All logical analysis would conclude whistleblowing cases would spike, yet the opposite is true. Whistleblowers fell silent in the aftermath of Covid, even if the wrongdoing never went away.

“I’m deeply sceptical that wrongdoing is in decline across the financial services sector. People and businesses have not changed. Instead, it shows the limitations of the FCA’s efforts to encourage whistleblowing. Without more transparency, speed, and meaningful action, people may be discouraged from reporting wrongdoing. Do people have enough faith in the regulators to blow the whistle? I’m not convinced.

“As for FCA action, our FOI demonstrates that there is a big gap between when a report is filed, and when it is concluded. Likewise, one may conclude that there is a political motive in the FCA’s reluctance to call out money laundering in its whistleblowing accounts. It may not want the UK to be seen as a money laundering hub.”

Elizabeth Gardiner, CEO of the Whistleblowing Charity, Protect, added: “Whistleblowers provide the FCA with vital information to prevent economic crime and improve enforcement.  In return they should expect timely and thorough investigations and prompt and regular feedback - this is vital for whistleblowers to have confidence in their regulator. Many cases are complex and may require a long period of time to investigate but we are aware that whistleblowers are rarely informed or provided with feedback on any part of this process. We would like to see this changed. 

“If more employers get whistleblowing right - and follow the FCA's rules - then we would expect the numbers reaching the regulator to decline. But it is disappointing to read of long delays and further investment in the FCA's whistleblowing function may help restore confidence, if it ensures that the vital evidence provided by whistleblowers is examined thoroughly and to a reasonable time frame.”