Central to the FSCB’s work was its annual Assessment and, in particular, its Survey of employees at member firms. Each organisation has its own unique culture, continually evolving. There is no single optimum type of culture that all firms should aspire to, and firms with very different cultures can produce good (or bad) outcomes for customers, clients and more broadly.
That each firm’s culture will be different, poses a challenge when it comes to developing useful metrics and enabling comparisons to be drawn between firms and over time. The FSCB did not, therefore, set out to measure or rank culture directly. Instead, it looked at what could sensibly be measured, and that could support an informed judgement as to the extent to which any culture was conducive to producing good outcomes. Accordingly, it constructed an Assessment Framework of nine characteristics (honesty, respect, openness, accountability, competence, reliability, responsiveness, resilience, and shared purpose), all of which – if demonstrated within a firm – could be expected to lead to good outcomes for customers, members, clients, employees, and society as a whole.
From 2016 to 2022 the FSCB Survey received around 380,000 responses from employees across 47 different organisations, with 20 to 30 firms typically participating each year. The data allowed the FSCB to track progress in the sector over time and provide insights to individual firms on how they compared to peers. To supplement the Survey, the FSCB gathered qualitative data from some firms in the form of focus groups with employees, interviews with executives and non-executive directors, and a written response to high-level questions posed to firms’ boards. Taken together, the data gathered allowed deep dives into themes of real interest to the sector such as speaking up and psychological safety, inclusion, decision-making and motivation at work, perceptions of gender equality in the workplace, responsible data use, the impact of the Covid-19 pandemic, and the FCA’s Consumer Duty. Through roundtables and knowledge-sharing events participating firms could share experiences and learn best practice from one another, while behavioural trials and experiments were run to robustly test new interventions that could bring out about improvements.
What have we learnt and how has culture in financial services changed over time?
Some of the largest improvements in Survey scores from 2016 to 2022 were on questions relating to leadership. In 2016, 62% of employees across the sector agreed with the statement ‘senior leaders in my organisation mean what they say’ and just 58% that ‘senior leaders in my organisation take responsibility, especially if things go wrong’. By 2022, these figures had improved to 73% and 68% respectively. These improvements came in the context of regulatory changes, such as the introduction of the Senior Managers and Certification Regime. For many other aspects of workplace culture, the importance of leadership was reinforced by the qualitative evidence. In focus groups exploring shared purpose, for example, employees in areas that observed close alignment between values and business practices more commonly said that leaders at their firm talked about firm values without cynicism and demonstrated them in day-to-day actions. They also more commonly cited observing consistent and practical communications from leaders, coupled with a genuine desire to listen to feedback.
The question most closely correlated to the two leadership questions in the FSCB Survey related to responding effectively to staff feedback. On this question, as well as those on speaking up, improvements across firms were evident, though in some cases from quite a low base. A deep dive into the theme of speaking up in 2018 and 2019 revealed that around a quarter of employees who had wished to raise a concern over the previous year had not done so, with respondents citing fear (feeling it would be held against them) and futility (that nothing would happen) as the main barriers to speaking up. Of those who did raise a concern, around four in ten did not feel that their concerns were listened to and taken seriously. Taken together, these findings highlighted the importance of not only creating environments and mechanisms that provide reassurance of being able to speak up safely, but also ensuring that people are listened to and that they can demonstrate where action has been taken.
A significant ongoing theme has been health and wellbeing. A standard finding in the early years of the Survey was that around four in ten employees across the sector often felt under excessive pressure at work and one quarter that work was having a negative impact on their health and wellbeing. Despite many firm-level initiatives to bring about improvements, very little change was seen on these questions until 2020, when scores improved markedly in the context of the Covid pandemic. Alongside this, the proportion of respondents using ‘supportive’ as one of three words to describe their firm rose sharply. While dipping slightly in 2021, scores on health and wellbeing bounced back again in 2022, and words such as ‘supportive’ and ‘inclusive’ became even more frequently used in describing firms.
In contrast to the trends seen on leadership, speaking up and wellbeing, progress has been more stilted on the customer focus questions. After some gains in 2017, these scores largely flatlined through to 2022. To illustrate, while there was a 10 percentage-point increase from 2016 to 2022 in the proportion of respondents agreeing that their organisation responded effectively to staff feedback, the improvement when it came to responding to customer feedback was less than half this, and with nearly all of these gains being concentrated in 2017. As firms focus on implementing the new Consumer Duty and ensuring that customer-centricity is rooted in their organisational culture, it may be interesting to consider whether there are lessons from the progress made on the internal responsiveness questions that can be applied in an external setting.
The breadth and depth of respondent-level data collected has allowed for detailed exploration of the experiences of different demographic groups and at the intersections of different groups. Among the many striking findings are:
- We have consistently observed a stark difference in the experiences of employees with and without a disability. Across all 36 core questions in the Survey, respondents with a disability tended to answer more negatively than any other demographic group. The difference was most pronounced on questions about personal resilience where, for example, 53% of employees with a disability said (in 2022) that they often felt under excessive pressure at work, compared with 35% of employees without.
- When exploring the theme of inclusion in 2021, we found that 14% of all employees said that they worried that people at work might draw conclusions about their ability based on stereotypes about their identity or background. This proportion tripled to 43% among Black / Black British employees and was also significantly higher (27%) among Asian / Asian British employees than most other ethnic groups.
- Women have, on average, tended to be slightly more positive than men when responding to most questions in the Survey. Notable exceptions to this general pattern have been questions relating to ethical behaviour and speaking up. Women are, for example, more likely than men to say that it is difficult to make career progression without flexing their ethical standards; that they see people turn a blind eye to inappropriate behaviour; and that they do not feel comfortable challenging a decision made by their manager. On the last of these, when we apply an intersectional lens to look at both gender and ethnicity, we see that the experiences of White British women are comparable to that of men overall, but that women from minority ethnic groups are, on average, markedly less likely to feel comfortable challenging a decision.
The link between employees’ perceptions and tangible outcomes at firm
The Survey results show areas that have improved and those where progress has been more muted. A key question is, however, the extent to which these results and the picture they paint of workplace culture are linked to actual outcomes experienced by customers and clients. Is there evidence to support the hypothesis that firms that score highly on the FSCB Survey are more likely to generate tangible benefits to customers, clients and society, than firms that score less well? And if so, are any specific questions or any of the nine characteristics particularly good predictors of positive outcomes?
The challenges of rigorously testing the link between results to the FSCB Survey and wider outcomes were set out in a previous article, Linking the FSCB Survey to tangible outcomes in financial services. They include, in particular, the relatively small number of firm observations and the lack of comparable outcomes data across the full range of firms. Notwithstanding these limitations, the FSCB’s early analysis indicated that the question set as a whole correlated positively with lower levels of prudential risk and better customer outcomes. For example, higher scores on questions about risk orientation and customer-focus appeared to link with lower levels of prudential risk, while higher scores on leadership, customer-focus and speaking up questions were associated with lower levels of customer complaints. A large caveat to this analysis was that it was based on publicly available outcomes data, which – being more readily available for larger firms – exacerbated the ‘small n’ problem.
To take this work further, the FSCB began a research partnership with the Bank of England, primarily to measure cultural cohesion or fragmentation in firms and establish how this is associated with prudential and business outcomes. The outcomes data held by the Bank allowed for a more comprehensive data-matching exercise to take place than was possible solely from publicly available data. While this work has necessarily come to an end with the FSCB’s closure, the initial results again indicated a positive association between employees’ perceptions of culture as measured in the Survey and prudential and customer outcomes at firms (i.e. that more favourable responses to the survey at a firm were, on average, associated with lower prudential risk and more positive customer outcomes).
Access to and availability of the FSCB Survey data
While the FSCB is closing its doors in 2023, the aggregated (non-firm identifying) data from its Survey from 2016 to 2022 has been deposited with the UK Data Service so that it can continue to be available as a resource for academics, practitioners, and other interested parties. This includes the industry results to the core and additional questions asked each year, breakdowns across all business areas and demographic groups for which results are available, and data on the distribution of results (benchmarks) across firms. We hope that this dataset will prove useful to researchers now and in the future, to the benefit of customers and clients of financial services firms and of other industries and sectors.