Whistleblowing reports to the FCA dropped by 9 per cent between 2019 and 2020, likely because the majority of the UK’s workforce left the office and operated remotely, according to new research from Kroll, a provider of services and digital products related to governance, risk and transparency.
Data obtained by Kroll from the FCA under Freedom of Information Act shows that there were 1,073 whistleblower reports to the FCA last year, down from 1,179 in 2019. Anonymous reports experienced a larger drop of 29 per cent, with just 206 reports compared to 291 in 2019. This is the first year-on-year fall since 2016, with steady growth in reports between then and 2019.
Last year brought significant disruption to working patterns across the world, and the majority of UK financial services teams worked from home for most of 2020. It is likely that home working also increased isolation and limited accidental discovery of questionable and illicit business practices.
By contrast, the US Securities and Exchange Commission (SEC) experienced its largest ever number of whistleblower tips for a fiscal year in 2020, with more than 6,900 reports contributing to an increase of 32 per cent from FY2019. Many US states had limited or no lockdowns, and this may explain the continuing increase in reports which had also been seen in the UK prior to 2020, as could the monetary incentives the SEC offered whistleblowers for coming forward.
Whistleblowing remains an important way to uncover corporate crime, but 2020 has shown it is also important to have other ways of monitoring and checking for compliance and encouraging good business practices.
Benedict Hamilton, Managing Director, Business Intelligence and Investigations, Kroll, says: “After a number of year-on-year increases in whistleblowing reports and an apparently growing culture of rooting out wrongdoing, the Covid-19 pandemic and ensuing remote working environment seem to have halted this progress. It is highly likely that the reduced visibility which colleagues have over others is behind the drop.
“Internal monitoring and compliance procedures for many businesses probably need to be increased, particularly at times when large numbers of staff are working from home.”