A new report has concluded that the financial services industry is failing to adopt voluntary standards crucial to rebuilding trust in banking, despite overwhelming support from those working in the sector.
Backing Market Forces, a report jointly commissioned by BSI, the UK National Standards Body, and the Chartered Institute for Securities & Investment (CISI), the professional body for securities and investment practitioners, argues that adopting voluntary standards, alongside regulation, could provide a ‘third way’ between self-regulation and over regulation from government.
The study analysed how voluntary standards could play a greater role in rebuilding a safer and more trusted financial services sector. Findings show that financial services decision makers overwhelmingly support the adoption of voluntary standards and believe such standards could help them navigate this highly regulated sector.
78% of those surveyed called for more standards in finance around people, products (71%) and processes (69%), with the majority (54%) favouring their creation by the industry as opposed to the regulator (23%).
The report argues that voluntary standards markets, used widely in industries such as food and shipping, could be used more widely in financial services if regulators and legislators considered a ‘third way’ for financial services regulation. While standards are already used in financial services they appear to be a relatively low user when compared to other sectors.
Scott Steedman, director of standards at BSI, said: “Given the mounting pressure on the financial services sector, Alderman Michael Mainelli’s excellent and timely report confirms that voluntary consensus standards could provide a valuable tool for the financial services community to share best practice in many areas of business, including products, processes and organizational development.
“Bringing consumers, the wider society and all stakeholders together to help create a trusted voluntary standards market in financial services, is a role that BSI as the National Standards Body is well placed to deliver.”