The Financial Conduct Authority (FCA) has published the findings
of its initial data exercise on bank account access and closures.
The information supplied by banks, building societies and payment
companies suggests that no firm closed an account between July
2022 and June 2023 primarily because of a customer’s political
views. The Payment Accounts
Regulations ban banks or building
societies discriminating on this basis.
The FCA will be doing further work with firms to verify the data
and to better understand the reasons behind, for example, the
closure of accounts due to reputational risk.
By far the most common reasons providers gave for closing,
suspending or declining an account was because it was
inactive/dormant or because there were concerns about financial
crime.
The FCA’s report is the result of information gathered from firms
at speed. The regulator has today set out what further work it
will undertake to examine the information provided and address
gaps in the data.
In its review, the FCA noted that unlike other jurisdictions
there is no right to an account in the UK and some protections,
for example the anti-discrimination measures in the Payment
Accounts Regulations, do not apply to businesses, charities,
political parties and civil society organisations.
, FCA Chief Executive,
commented:
'While no bank, building society or payment firm reported to us
that they had closed accounts primarily due to someone’s
political views, further work is needed for us to be sure.
'As we undertake that work, the time is also right for a debate
on how we balance access to bank accounts with the threat of
financial crime, as well as firms’ reasonable risk and commercial
appetites. An important question for policy makers is whether all
individuals, businesses and organisations should have the right
to an account, as is the case in some other countries.
'What’s more, international comparisons suggest robust digital
identities could play an important role not only in countering
financial crime but also in aiding financial inclusion.'
The FCA’s further work will include:
- Further follow up to provide assurance of the accuracy of the
data reported to us, concentrating particularly on outlier firms.
- Additional supervisory work to be sure of firms’ conclusions
on accounts closed for political reasons and closer analysis of
accounts closed for reasons of reputational risk.
- Further review of declined applications for and terminations
of basic bank accounts.
- Further research into the reasons why 1.1m people in the UK
are unbanked and the characteristics of this population.
- Engagement with consumer groups and organisations to
understand their experiences and impact of account declines,
terminations and suspensions where these are within our
regulatory remit.
- A financial inclusion sprint in Q1 2024 focussed on improving
consumer access to financial services.
The FCA has also reiterated to firms their obligations under the
Consumer Duty, and the need to ensure they are collecting
accurate and sufficient information to fully assess whether they
are delivering good outcomes for their customers. The FCA will
take prompt action if significant issues at firms are identified.
The FCA has also indicated close working with Government on these
issues and set out a number of areas Government may wish to
consider, including:
- greater checks by Companies House to support the fight
against fraud
- the development of a strategic approach to digital identity
to aid financial inclusion and lessen financial crime risk
- consideration, as part of the passage of the Online Safety
Bill, of whether the cost of compensating for consumer losses due
to fraud is being appropriately shared.
The FCA has also published an international perspective on
account closures.
Notes to editors
- Report on UK Payment Accounts: access
and closures.
- Read our data request - this
included the number of accounts closed and suspended,
applications denied, and the reasons why.
-
FCA letter to Chancellor:
Provision of Banking Services.
-
International de-risking
research note.
- Across personal and business accounts, there were 4 cases and
an additional 4 complaints reported to us by the firms with
‘expression of political or any other opinions’ as the reason for
the account closure or complaint. We followed up directly with
firms on these cases and further information showed that the
primary reason for action was not the ‘expression of political or
any other opinions’. For the majority of cases it was, in fact,
customer behaviour (e.g. racist language directed at staff).
