Culture is Contagious: How Positive Workplace Cultures Shape Consumer Outcomes

At the 10th Annual Culture and Conduct in Financial Services Summit, Emily Shepperd, Chief Operating Officer at the FCA, highlighted the vital role culture plays in decision-making, and its far-reaching impact on consumers, markets, and the broader economy. She stressed that culture remains a key regulatory focus, urging firms to build healthy cultures that enable responsible risk-taking for sustainable long-term growth.

Key Points from the Speech:

• Culture Drives Conduct: Culture influences decision-making, affecting outcomes for consumers, markets, and the economy.
• Foundations for Growth: Responsible risk-taking is rooted in healthy firm cultures that support long-term economic growth.
• The Spread of Culture: Positive behaviours—like encouragement and open communication—help create a supportive work environment, while negative behaviours—such as silence in the face of wrongdoing—can quickly spread, damaging the culture.
• Regulatory Efforts: The FCA continues to collaborate with industry stakeholders to improve culture and conduct standards across financial services.

The Impact of Positive Culture on Consumer Outcomes

A positive culture within firms translates to tangible benefits for consumers:

• Enhanced Decision-Making: Promotes ethical behaviour and responsible decisions that result in fairer, more transparent practices.
• Improved Service Quality: Engaged, valued employees provide better customer service, driving higher satisfaction and loyalty.
• Trust and Confidence: A strong culture fosters trust, as consumers are more likely to believe the firm operates with integrity.
• Innovation and Responsiveness: Positive cultures encourage innovation, leading to better products and services that meet consumer needs.

To summarise her speech, fostering a positive culture is crucial for better consumer protection, satisfaction, and trust in the financial system.

What Firms Should Do

With the Consumer Duty firmly on the agenda, firms should consider prioritising the following actions to nurture a positive culture:

• Promote Ethical Behaviour: Lead by example, encouraging responsible decision-making at every level.
• Engage and Value Employees: Create an environment where employees feel empowered and motivated to perform at their best.
• Encourage Open Communication: Foster a culture of openness where staff feel comfortable sharing ideas and concerns.
• Address Negative Behaviour: Actively tackle negative behaviours that could undermine the firm’s culture and overall health.
• Collaborate with Regulators: Work closely with the FCA to align with regulatory expectations and best practices.
• Focus on Long-Term Growth: Build a culture that supports informed, responsible risk-taking for sustainable growth.

How We Can Help

Padda Consulting has supported numerous firms in conducting cultural reviews and developing strategies that align with regulatory expectations while reflecting each firm’s values. If you’re unsure how your firm’s culture measures up to regulatory standards or simply need an independent perspective, please feel free to contact us. We can help to ensure you’re on the path to achieving best practice in culture and conduct.