UK Financial Conduct Authority. Picture: 123RF/Piotr Swat
UK Financial Conduct Authority. Picture: 123RF/Piotr Swat

London — The UK’s Financial Conduct Authority (FCA), which has made promoting diversity a top priority for the industry, does not yet track the racial and ethnic make-up of firms under its watch.

The regulator of thousands of financial firms in London and across the country confirmed it is not collecting the data in response to a request for diversity statistics.

“We recognise there remains much to do to ensure the financial services sector truly reflects the population it serves,” the FCA said.

The data gap emerged after Nikhil Rathi, the watchdog’s incoming CEO, put the finance industry on notice that it needs to increase diversity. Rathi told UK MPs that the FCA could block senior appointments at firms if they do not show enough progress. The regulator has argued that it is important to help firms guard against groupthink, make better decisions and help them compete.

“It is shocking that so little effort is being made to monitor the levels of discrimination in the finance sector, one of the highest-paid in the country,” Diane Abbott, the first black woman MP in the UK, said. “This is a complete market failure and must change. The government should act to make sure that it does change.”

Diversity dashboard

The regulator has for years disclosed the percentage of its own staff that is black, Asian and minority ethnic. The number increased to 26% in its 2019 annual report, up from 21% in 2014, the first report published after the FCA was formed the previous year.

It keeps a “diversity dashboard” and keeps data on new hires and turnover. It wants people from black, Asian and minority ethnic backgrounds to make up 13% of its senior leadership by 2025, roughly mirroring their share of the UK’s population, up from a goal of 8% this year.

Financial firms are taking different approaches to compiling such data. Lloyds Banking Group says that 10.3% of its workforce is from black, Asian and minority ethnic backgrounds, which falls to 7.3% for senior management.

HSBC, which pledged last week to double the number of black staff across its upper ranks, said it did not track such data. CEO Noel Quinn outlined steps the lender would take, including updating its recruitment processes.

Granular data

Advocates for more diversity in business say a critical step is having more granular data.

“If we are trying to improve the number of black people in an organisation, first we need to understand where we are and then measure that progress,” said Jonathan Ashong-Lamptey, a diversity campaigner and consultant to FTSE 100 companies. “Anyone who is serious about making strides in this space will be attempting to capture the data.”

In the US, the Equal Employment Opportunity Commission has for years required diversity data from firms with at least 100 employees. The Federal Reserve has more recently requested a diversity self-assessment from banks; in 2019, the Fed received only 103 responses from 804 requests. The central bank attributed the low rate to firms’ worries that the data could become public.


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