Financial services firms have for too long valued those who bring in the money above those who build client relationships, Tracey McDermott said.

This in turn may have prevented some from challenging unethical practices, she added.

“People within the industry had forgotten why financial services firms existed in the first place,” McDermott, speaking at the Thompson Reuters Compliance & Risk Summit in London, said.

“Rewards flowed to those who were seen to make money not to those who built long-lasting client relationships, so people, naturally, thought that was what institutions valued.”

McDermott said the industry does not attract “particularly bad people”, but that, because ‘bad’ behaviour tended to rewarded, individuals’ own moral compasses stopped working.

“I believe that in financial services – as in any other walk of life – the people range from the good to the bad with everything in between. But individual wrongdoing – sometimes deliberate, sometimes misguided – has still flourished. Why?

“If what is valued and rewarded is ‘bad’ behaviour, then it may be difficult to fight against that tide. So firms in the future have to ensure that they are positively rewarding those who do the right thing.”

Where there are challenging decisions about the balance between ethics and profits to be made, firms “need to be very visibly championing the former over the latter”, she added.