Employees working in financial services are better trained to spot corruption and more likely to take action if they suspect fraud than employees in other sectors, according to the EY EMEIA Fraud Survey.

The survey asked more than 3,000 board members, executives and managers, across 36 countries, about their companies’ anti-corruption policies. The survey included 458 respondents from financial services.

More than 75 per cent of respondents working in financial services firms said that their company had a clear code of conduct and anti-bribery/anti-corruption policy in place, in contrast to an average of 57 per cent across all sectors.

Nearly two-thirds (65 per cent) of those working in financial services also received adequate training regarding their company’s anti-corruption requirements, in comparison with a third of respondents from all sectors.

The range of guidance regarding anti-bribery included in company guidelines was also more extensive in financial services, with 71 per cent of respondents advising that their company policy included specific reference to gifts and 63 per cent referencing hospitality as a core focus.

Across all sectors these figures fell to 63 per cent and 56 per cent respectively.

Respondents were also asked whether they felt their company’s anti-bribery policy was relevant to their own role and their immediate team.

In financial services, 67 per cent agreed with this statement, compared with 49 per cent across all industries. Similarly when asked about compliance, 55 per cent of financial service workers said their company’s policy was relevant and effective to their role in contrast to an average of 38 per cent in all sectors.

Some 69 per cent of financial services respondents said there were clear penalties for breaking their firm’s anti-bribery/anti-corruption policies, compared to 49 per cent across all industries. Fifty-six per cent of respondents working in financial services said their company had taken action against someone who had flouted bribery procedures, in comparison to an average of 38 per cent across all industries. Fifty-nine per cent of financial services respondents said they had a whistle blower hotline, in contrast to just 34 per cent across all industries.

Sanjay Bhandari, Partner in Fraud Investigation & Dispute Services at EY says:

“In part driven by regulation and in part by some of the more high-profile scandals that have hit the sector, financial services companies have undoubtedly taken impressive steps to implement effective and robust anti-bribery policies for their employees.”

However, the findings across all 36 countries show that, despite increasing regulatory focus, financial services firms perform no better than firms in other sectors when it comes to misreporting.

Nine per cent of executives in financial services admit cases of revenues recorded before they should have been (compared to nine per cent of all firms); seven per cent were aware of under-reporting of costs (compared to eight per cent of all firms); and nine per cent knew of customers being sold unnecessary products to meet short-term sales targets (compared to six per cent of all firms).

Sanjay continues: “The damage to shareholder value that can arise as a result of misreporting or corruption can be far greater than regulatory sanctions. The reputational damage inflicted on companies that are found to be complicit in such failings can last for years, especially in financial services, and we would encourage firms to really focus on these issues going forward.”

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