AI in financial services: control, evidence and regulation
The recent release
20/04/26
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Five priorities for managing non-financial misconduct risk
The recent release from the FCA on non-financial misconduct highlights a critical shift in regulatory expectations. As firms strive to align their cultures and governance with these new standards, understanding the FCA’s guidelines is essential to fostering a compliant, ethical workplace.
What firms should do next
The FCA outlines several key actions that firms must undertake to mitigate risks associated with non-financial misconduct:
- Establish clear policies and procedures
Firms should develop comprehensive policies that address non-financial misconduct, ensuring they are communicated effectively across all levels of the business. This includes defining unacceptable behaviours and establishing a framework for reporting and responding to incidents.
- Cultivate a supportive culture
A strong organisational culture that promotes openness and accountability is vital. The FCA emphasises the importance of leadership in modelling appropriate behaviour and creating an environment where employees feel safe to speak up about misconduct.
- Implement effective training programmes
Regular training sessions should be conducted to educate employees about non-financial misconduct, reinforcing the firm’s values and expectations. By equipping staff with the knowledge and tools to identify and address issues, firms can foster a proactive approach to compliance.
- Monitor and review practices
Continuous monitoring and evaluation of policies and practices are essential. Firms should establish metrics to assess the effectiveness of their initiatives and make necessary adjustments based on feedback and incident reports.
- Engage with stakeholders
Transparency and engagement with stakeholders, including customers and the regulator are crucial. Firms should seek feedback on their approach to non-financial misconduct and use it to enhance their policies and practices.
Independent validation
Responding to the FCA’s expectations isn’t just about understanding the guidance, but about translating it into practice. TCC’s experts are working with firms to support the design of frameworks that bring structure and consistency to decision-making and help align approaches across HR, risk, and compliance, ensuring that misconduct is assessed and managed coherently.
A key focus is governance, so clarifying senior management accountability under SM&CR is paramount, along with strengthening oversight and ensuring that decisions are appropriately documented and escalated where applicable.
We are also seeing increasing demand for better insight into culture and conduct risk. Developing management information that moves beyond individual cases and provides a clearer view of patterns, trends and outcomes is becoming an important part of that picture.
In each of these areas, the objective is not simply to meet regulatory expectations but to embed approaches that are sustainable and can be applied consistently to stand up to scrutiny over time. Get in touch today to learn how TCC can support your firm.