Should bank employees be made to spy on each other?
In a KPMG LLP survey, 68% of the financial services employees responding said they had witnessed unethical behavior at their companies in the year past. And 48% said they lacked confidence that management knew what was going on.
Deceptive sales tactics, the mishandling of confidential or proprietary information, and violations of a fellow employee's privacy rights were among the more egregious forms of misconduct reported by survey respondents across all industry categories.
KPMG sent business ethics questionnaires to 3,075 working adults last October; 2,390 questionnaires were filled out and returned.
About 15% of them from financial services employees. Also surveyed were employees of communications, entertainment, industrial, consumer product, and health-care companies.
Though 68% may seem high, over all 76% of the survey respondents reported having witnessed breaches of ethics at their companies in the year past. But Gene O'Kelly, vice chairman of the accounting and consulting firm's financial institutions practice, said the findings for employees of financial services companies were particularly alarming given recent money-laundering and securities fraud scandals.
"The results should be better" for financial services firms, Mr. O'Kelly said.
Seventy-three percent of all respondents said they believed the misconduct was brought on by low morale. Seventy blamed pressure to meet schedules, and 65% said it was because of pressure to hit unrealistic earnings goals.
As heavily regulated companies, banks and other financial services firms must follow strict compliance and internal control guidelines. Mr. O'Kelly said financial services firms may need to "reaffirm" their corporate codes of conduct in light of the survey's findings.
A corporate hot line to report suspicious behavior may be one solution, though Mr. O'Kelly said only 25% of survey respondents from the financial services industry indicated a willingness to use one to report misconduct.