The UK Financial Conduct Authority (FCA) has released its initial report on potential discrimination at UK banks. The report follows the saga of Nigel Farage, a vocal political personality and former UKIP leader, who had his account shuttered at Coutts after management decided his values did not align with theirs. According to the FCA, little evidence has been uncovered so far that other accounts are being closed due to legal political beliefs.
Nikhil Rathi, FCA Chief Executive, issued the following statement:
“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 said it will continue to investigate account access and closures due to discrimination.
The regulator outlined its future work:
- 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.
Intolerance is a hot topic today, but it appears that intolerance goes just one way. Bigotry, or the inability to accept others’ opinions, has undermined the concept of free speech and raised concerns that financial services firms will yield their power in a politically “correct” manner to cancel out of favor account holders (and their opinions). This phenomenon is not unique to the UK.
Farage has pushed back against the findings to express his disagreement on X (formerly Twitter).
The FCA says it finds no evidence of politicians being ‘debanked’ over political views. This new report is a whitewash and a joke.
If we don’t have a regulator that is fit for purpose, what hope is there for our banking industry? pic.twitter.com/d3K1FNNO7A
— Nigel Farage (@Nigel_Farage) September 19, 2023
Farage described the FCA as a very political organization and one that is not fit for purpose.