On 19 September 2023, the FCA published a report setting out the findings of its initial data exercise on UK bank account access and closures. The report also explains what further work the FCA will undertake to examine the information provided and address gaps in the data.
In order to better understand the scale and reasons for any account closures, the FCA collected data from 34 firms. Based on that data, the report highlights the following findings:
- Information provided by those banks, building societies and payment companies suggests no firm closed an account between July 2022 and June 2023 primarily due to a customer’s political views. The Payment Accounts Regulations ban banks or building societies from discriminating on this basis.
- 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.
Following this report, there are areas where the FCA will follow up to better understand the data firms have provided and the impact of account access and closures on consumers. Its further work will include:
- Further follow up to provide assurance of the accuracy of the data reported to the FCA, 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 the FCA’s regulatory remit.
- A financial inclusion sprint in Q1 2024 focussed on improving consumer access to financial services.
The report also draws out actions for firms in the context of the Consumer Duty, reiterating their obligations under the 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 also indicates close working with the government on these issues and sets out matters for the government to consider as part of any steps to widen access, 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, and 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.
Separately to the report, the FCA also published a research note on international perspectives on de-risking and account closures.