We want to see greater levels of diversity and inclusion (D&I) across the UK financial sector. Read about the work we’re doing to drive change in this area.
We believe that improving D&I in the financial services sector can benefit consumers and markets by:
- helping to address groupthink
- supporting healthy work cultures
- unlocking diverse talent
- improving how firms understand and provide for diverse consumer needs
Greater diversity can help firms access a range of skills, knowledge and experiences when making decisions or designing products or services. It can also support competitiveness by widening the sector’s talent pool.
But to ensure the benefits of a diverse workforce can be fully realised, firms need to promote inclusive workplace cultures in which all employees feel comfortable contributing, providing challenge and voicing their concerns. This is why both diversity and inclusion (D&I) matter.
Working to accelerate change
We want to work together with industry to accelerate change.
Despite increasing recognition within financial services of a need to improve D&I outcomes, progress remains limited. As a regulator, we already consider D&I when evaluating firm culture and conduct. But we want to do more to make sure the benefits of D&I are realised across the firms we regulate.
In July 2021, we published a Discussion Paper jointly with the Prudential Regulation Authority (PRA) that set out a range of proposals to increase D&I in the financial services sector. Alongside this, we published a literature review (PDF) exploring available studies on diversity.
The Discussion Paper opened a conversation about why D&I is important to us as regulators, and the ways we might be able to drive change.
The feedback we received helped inform our CP23/20: Diversity and inclusion in the financial sector – working together to drive change, which we published in September 2023. The paper proposes a new regulatory framework on diversity and inclusion (D&I) in the financial sector.
Diversity of boards and executive management
Separately, we’ve also published our final policy (PS22/3) on promoting transparency on the diversity of listed companies’ boards and executive management.
Companies must now disclose the breakdown of diversity by sex or gender and ethnicity for their boards and executive management. Companies not meeting the targets will need to explain why.
Find out more about the diversity of our Board and executive management.
Using data to monitor progress
In 2021, together with the PRA and the Bank of England, we issued a pilot data survey to firms to find out more about the D&I data they collect and how they use it. The survey showed that most firms only collect data against a small number of demographic characteristics.
The pilot data survey was followed by a multi-firm review in 2022 to explore how firms design and embed their D&I strategies. Our review showed that initiatives are generally focussed on a narrow set of characteristics and that there’s more progress to be made in terms of how firms collect and use data to monitor D&I outcomes.
Our other work
There are important links with other areas of our regulatory work, including:
- our work on culture and governance
- our guidance for firms on the fair treatment of vulnerable customers
- our Consumer Duty
- our DEI Innovation Spotlight
- our Financial Lives Survey, which helps us capture the different experiences of diverse consumers
