DP 21/2: Diversity and inclusion in the financial sector – working together to drive change

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Discussion Paper closed

We are engaging financial firms and other stakeholders in a discussion on how we can accelerate the pace of meaningful change on diversity and inclusion in the sector. In this joint Discussion Paper (DP) from the Prudential Regulation Authority (PRA), the Bank of England and the FCA, we look at what role we can most usefully play to support this change.

Read DP21/2 (PDF)

We recognise that the financial sector has taken steps forward on diversity and inclusion. But there is much more that needs to be done to create truly diverse and inclusive organisations that meet the diverse needs of those we serve.

Diversity and inclusion are critical to our work on culture and governance, particularly for boards and senior management. For the FCA, it will also be based in existing work on the treatment of consumers, including vulnerability and the proposed new Consumer Duty (CP 21/13).

Research shows the positive benefits between diversity and inclusion and positive outcomes in risk management, good conduct, healthy working cultures, and innovation. This DP follows our recent expectations set out in our Guidance for firms on the fair treatment of vulnerable customers and research from our Financial Lives 2020 survey.

We have also conducted a literature review to understand the evidence of the impact of diversity and inclusion in the workplace.

Who this applies to

We welcome contributions from all parts of the financial sector, and parties with an interest in this issue. This includes:

  • regulated firms (referred to as ‘firms’ in this DP)
  • industry groups / trade bodies
  • consumer groups and individual consumers
  • policy makers and other regulatory bodies
  • industry experts and commentators
  • academics and think tanks
  • organisations representing the interests of groups of people

Next steps

This discussion paper is closed for comments.

4 January 2023 update: We received a broad range of feedback on the discussion paper, which we are carefully considering. Feedback from this will help us develop proposals for consultation in 2023.

We have presented our findings on how financial services firms are designing and embedding diversity and inclusion (D&I) strategies and an overview of initiatives to improve D&I, which industry leaders can consider in reviewing their own diversity and inclusion strategies. This work is also discussed by Executive Director of Consumers and Competition, Sheldon Mills, in his speech at the Association of British Insurers (ABI) Diversity, Equity & Inclusion Conference.

8 October 2021 update: Voluntary data collection survey – Chapter 4 of the DP sets out the regulators’ thinking on the collection and reporting of diversity data, and outlined our plans for a voluntary pilot data survey. On Monday 4 October, we sent the survey to all FCA and PRA dual-regulated firms, a sample of FCA solo-regulated firms, and a selection of Financial Market Infrastructures. The survey questions are linked to within the covering email sent to firms.
23 September 2022 update: Feedback from this discussion paper will help us develop our proposed rules. We had planned to publish these rules in Q3 2022. We are carefully considering feedback and plan to provide a further update on timing in the next Regulatory Initiatives Grid which is expected to be published in November.

Page updates

: Information added 23 September 2022 update
: Information added voluntary data collection survey and next steps updated as DP now closed for comments