The Financial Conduct Authority has said regulation can "only go so far" in improving culture across the financial services industry.
This morning (12 March) the regulator published a series of essays discussing culture in a bid to start a debate about how this can be improved.
The FCA said there were three themes which emerged from the essays and one of these was that more regulation was not necessarily the answer.
It said: "There is a recognition that regulation – at least in its current form – can only go so far in improving culture. Firms and other industry stakeholders have a vital role to play.
"This also raises constructive questions for the role of the regulator: how can we support organisations to learn from themselves and others, rather than simply comply? What are the practical implications of a system perspective on how we supervise firms?"
The FCA highlighted that in the decade since the financial crisis, there have been instances of rate-rigging, rogue trading and mis-selling despite record fines, increased investigations and a growing compliance industry.
As a solution to this, it highlighted cultural change across the financial services industry and cited the change in attitudes towards drink driving as an example, with the number of drink drive casualties in Great Britain falling by 73 per cent since 1979.
The FCA said the introduction of the senior managers regime, due to be expanded across the whole financial services industry in the near future, was "a start" but it said there was still "a way to go".
Among the other themes which the FCA pulled out from the series of essays was the need for a shift from "linear thinking" to a "systems perspective".
The regulator said: "Whereas linear thinking diagnoses one cause to one effect, a systems perspective acknowledges the whole system around the individual and the interactions and inter-dependencies between each part in the system.
"The question is not whether to focus on the individual or the broader organisational system. It is about examining the influences surrounding the individual, be it peers, managers, leaders, incentives, goals etc, and how aligned these factors are."
The FCA has said the essays provided some actions which chief executives could take on the issue of culture, including "fostering environments of trust", "applying a systems perspective" and using behavioural science to guide incentives.
It has also encouraged those in the financial services industry to comment on the essays.