18.11.2025
The regulator’s gaze has shifted from spreadsheets to behaviour, from tick-box compliance to real accountability. Non-financial misconduct is front and centre of the FCA’s agenda, pushing firms to ask tougher questions: What does our culture say about us? How do we handle risk before it hits the headlines? And do our leaders truly reflect the values we claim to hold?
At the same time, the conversation around diversity and board composition has grown louder. Across boardrooms and industry panels, one truth keeps occurring: diverse leadership builds stronger businesses. It drives better decisions, sharper governance, and cultures that live their values.
Through the Women Who Make it Happen (WWMIH) podcast series that I host, I’ve spoken with women across fintech, banking, and financial services who haven’t just “broken barriers”. Their stories prove that inclusion goes beyond policy; It’s progress in action.
The data behind the debate: key non-financial misconduct statistics
As someone who’s spent years advising financial institutions on risk and governance, I’ve watched the Financial Conduct Authority (FCA) – the UK’s financial regulator – transforming. They want to know not only what your organisation does, but how it behaves.
Non-financial misconduct (NFM) is no longer confined to the HR department. It has grown to a defining measure of how accountable a firm truly is. And when I sit down with leaders across financial services, one message comes through loud and clear: culture is conduct. It is also a hard measure of leadership credibility… and it’s being tested like never before.
The FCA’s survey shows a significant rise in reported NFM cases. Bullying and harassment account for 26%, discrimination 23%, and a worrying 41% fall into an “other” category, including inappropriate language, substance misuse, or general behavioural breaches. Unfortunately, these aren’t isolated failings.
For me, the real lesson in these figures is about compliance but also about character. Numbers reveal trends, but behaviour reveals truth. And right now, the FCA isn’t just asking firms what they do; it’s asking who they are.
When ethics becomes strategy
The best-led firms treat ethics as strategy, not paperwork. During WWMIH conversations with women leading compliance, risk, and fintech transformation, I’ve seen how inclusion and accountability are redefining good governance.
Take Alia Mahmud, Deputy Money Laundering Reporting Officer and Senior Compliance Manager at Dojo, who spoke in her episode about identifying financial crimes tied to sexual exploitation – work that demands both technical precision and human understanding.
As I reflected on her story, it reminded me that misconduct isn’t abstract. It’s human. It’s about people being exploited, silenced, or overlooked, and the ripple effects reach far beyond the balance sheet.
When we talk about non-financial misconduct, we’re talking about people’s dignity. That’s why accountability can’t just live in compliance – it has to live in leadership.
What boards need to know
Firms that fail to address NFM risk their regulatory standing and stakeholder trust. From my perspective, there are four areas that demand board-level attention:
1. Data-driven conduct risk
The FCA is urging firms to manage conduct risk with the same rigour as credit or liquidity risk. Data is now central to identifying cultural blind spots early and preventing issues before they escalate.
As Alia noted,“In the UK, the FCA’s stance on fintech regulation has created an environment with far more guidelines, tighter rules, and greater scrutiny. Companies now face detailed expectations – from how they assess credit and affordability, to what constitutes good and bad collection practices, and even how much they can charge users. It’s all in the detail.”
She’s right – and I see that as a cultural as well as operational shift. It’s no longer enough to react after the fact. Leadership must be curious enough to interrogate trends before they become headlines.
From inside the system, Dane Pedro, Head of Compliance and MLRO at Mollie, brings a useful lens: as she said on WWMIH, she worked at the FCA – deliberately to understand how the regulator operates – spending time with supervision and enforcement teams. That experience gave her insight into the thought process behind new rules and enforcement action. She also notes the FCA actively encourages staff to move into industry to bring best practice into firms. Also, she has mentored a university graduate who successfully applied to the FCA’s graduate scheme.
It’s a cultural as well as operational shift: leadership can’t wait to react; they need to interrogate trends before they hit the headlines.
2. Consumer protection
Through Consumer Duty, the FCA has raised the bar for how firms engage with customers – and rightly so. For firms, that means meeting customers where they are (especially those facing financial difficulty) with calm, empathy, and a commitment to solving problems, not just collecting payments.
That’s exactly what Heidi Physick, Chief People Officer at Oodle Car Finance, mentioned in her episode, talking about the human side of this transformation – praising agents who handle financially distressed customers with calm, empathy, and understanding.
Suzanne Homewood, Managing Director at Moneyhub, said on WWMIH: “Organisations have a clear responsibility to deliver the best outcomes and fair value for their customers. Data isn’t a panacea for Consumer Duty – but it’s a powerful capability. Used well, it adds into decision-making and deepens understanding of customer behaviour.”
To me, it’s proof that empathy and ethics can coexist with commercial success.
3. Ethical technology: data, machine learning and AI
This brings us to the ethical use of technology. In a world where AI drives decision-making, ethics must be built into the code.
Alia put it well, “I definitely see Fintech as one of the industries that truly embraces data and a data-driven approach. Take fraud prevention – losses are rising year on year, and that’s where data, machine learning, and AI really come into play. These technologies put teams on the front foot, giving them the speed and insight to fight fraud more effectively.”
As I said during the podcast, regulations are often seen as barriers to innovation – but they’re not. They’re enablers. They give firms the framework to innovate safely and sustainably. The same principle applies to AI: it’s about embedding it in the right way, for the right reasons.
Denise Ho, Head of Operations Technology Risk at ClearBank, echoed this in her episode: companies must be mindful and thoughtful about how and when we use technology like AI, and ensure they take regulators and the business along with them.
I couldn’t agree more. Technology will only ever be as ethical as the humans who train it. Boards need to understand that innovation and integrity aren’t opposing forces. They’re partners.
For leaders, the real challenge isn’t in adopting AI but ensuring it’s used ethically and with purpose.
4. Operational & cultural accountability
Regulators now expect firms to understand their controls and risks – financial and non-financial conduct. Mistakes like client funds being mixed with office money have already resulted in heavy fines, showing that weak operations often reflect deeper cultural gaps.
In her episode, Clare Pearson, Strategic Advisor at Finexer and Head of Technology Operations & Delivery Management at Fnality, shared how she faced exactly that challenge: “Client funds were mixed with office money – it wasn’t a great situation. But we managed to turn it around. The real challenge wasn’t just fixing the processes; it was bringing the team with me. Many were resistant to change […] but in the end, it worked.”
Clare’s experience is one I see often – operational and cultural failures usually share the same root: lack of ownership.
One thing is clear: operational discipline and cultural integrity are inseparable. You can’t outsource accountability – and when ownership is unclear, misconduct fills the gaps.
As Denise put it: “There’s a growing expectation from regulators around transparency, accountability, and resilience – and that pressure is only going to increase.”
Diversity in leadership: beyond compliance
True inclusion is not a quota; it’s a capability. For leaders, the challenge is to ensure inclusive culture that promotes ethical behaviour.
Alia put it simply: “You still need diversity of thought… different personality types and strands coming together. Otherwise, you’re stuck in an echo chamber.”
She’s right. When everyone in a room looks and thinks the same way, blind spots multiply. Diversity – of gender, culture, experience, and mindset – is a safeguard against groupthink.
Similarly, Meredith Beeston, Financial Crime Compliance Director at ClearBank, highlighted in her episode the value of diversity: “Across the firms I’ve worked with as a consultant, I’ve seen incredible diversity. People come from all sorts of backgrounds – former military, law enforcement, graduates, even school leavers who’ve come straight into the industry. Financial crime isn’t something most people set out to do; they find their way here from everywhere. That mix of experience and culture is what makes the space so dynamic.”
Culture and courage
I’ve seen too many organisations where “speak up” exists in the policy but not in practice.
Raluca Efford, COO at Vemi Money, highlighted in her episode that it is crucial to “You need a culture where it feels safe to speak up… because when people fear the consequences of challenging the status quo or challenging the leaders’ opinion in the room you just never truly innovate, you never truly evolve.”
Similarly, Tanja Gihr, Non Executive Director at One Home and Former Head of Sustainable Banking EMEA at Barclays Investment Bank, feels a duty to help overcome gender bias: as she said in the podcast, she wants to push people on “speaking up and taking a seat at the table”.
That resonated deeply with me. Firms must ensure misconduct reporting systems are not just robust but trusted. And HR and legal teams are aligned, so no issue falls through the cracks.
Courage and culture go hand in hand. If you want a compliant business, build a culture where people can speak up – and be heard.
In my own career, I’ve seen how fear of getting it wrong can paralyse decision-making. Yet culture is defined not by the absence of mistakes, but by how we respond when they happen.
The bottom line: broadening the boardroom
As I’ve discussed often, the future of governance lies in breadth of experience. Boards that blend finance with ESG, tech, and behavioural insight will better navigate risk.
Firms like Uber or Moneyhub, with gender-balanced boards, are setting the pace – but there’s still work to do.
A board that reflects its customers and community is a board that understands risk more deeply… and leads more wisely.
Culture is now a compliance issue. Non-financial misconduct is a risk issue. Diversity is a leadership issue.
Together, they form the foundation of sustainable, ethical business.
And that’s the challenge I put to every board I work with: How your people behave when things go wrong tells the regulator – and your customers – who you really are.
Across financial services, regulators and boards are aligned on one goal: embedding ethics, inclusion, and broad experience at the top. The future of financial growth will be built on accountability, diversity, and trust.
By Michelle Khan, Director – Risk & Banking Division, Morson Edge
