Diversity top of agenda for new FCA boss amid ‘deep issues’ in industry

The incoming boss of the City watchdog has said he will be focusing on diversity as one of his priorities to address “deep issues” in the financial services industry when he takes up the post in October.

In his appointment hearing with MPs on the Treasury Select Committee, new Financial Conduct Authority (FCA) chief executive Nikhil Rathi said he wanted to encourage “diversity in all its dimensions” as one of the cultural changes he is looking to make at the regulator.

Mr Rathi – who is leaving his post as chief executive of the London Stock Exchange responsible for overseeing the UK markets to take up the role on October 1 – told MPs the Black Lives Matter movement had “touched a nerve” in organisations and was helping employees speak up about diversity issues.

He said: “There are deep issues in the financial services industry and I’m sure they are challenging the FCA as well.

“There is an issue in terms of the talent pipeline in the organisation – how talent is attracted in and how talent is developed.

“There will, I believe, be issues to be discussed around unconscious bias and I think the Black Lives Matter movement has really touched a nerve in many organisations where colleagues are beginning to speak up much more openly about the issues.”

He said diversity of thought would be “critical” in helping the FCA tackle the complex policy problems it is facing.

The incoming successor to former FCA boss Andrew Bailey said other changes he would be looking to make include increasing the use of data, technology and analytics at the regulator, as well as shared resources and collaboration across departments.

He told MPs he will also be putting consumer protection at the top of his agenda, in particular as households face possible hardship amid the coronavirus crisis.

MPs questioned him on plans to look into protection for vulnerable customers, in particular amid concerns that mortgage and payment holidays amid the crisis may impact their credit ratings.

He said: “We are dealing with an extraordinary situation where we have millions of consumers around the country facing very difficult circumstances and many vulnerable consumers in particular facing challenges.

“In the short-term, a core focus is going to be on how to manage the smooth return hopefully to normalcy as we come out of the pandemic.”

He added that he did not want to be “feared” in his role as head of the watchdog.

But he admitted that he “hasn’t applied for this job to be liked”.

“I would like the FCA to be defined as tough, as assertive, as thoughtful, as decisive and working with pace and agility,” he said.

Mr Rathi was unveiled as the new FCA boss by Chancellor Rishi Sunak last month and replaces interim chief executive Christopher Woolard, who took charge in January after former boss Mr Bailey was appointed Governor of the Bank of England.