UK Banks Investigated for Potential Discrimination, FCA Report Reveals
The UK Financial Conduct Authority (FCA) has recently published its initial report on potential discrimination in UK banks. The investigation was prompted by the case of Nigel Farage, a prominent political figure and former leader of the UK Independence Party (UKIP), whose account was closed by Coutts due to a misalignment of values with the bank’s management. However, the FCA’s findings have so far shown little evidence of other accounts being closed based on legal political beliefs.
Nikhil Rathi, the Chief Executive of the FCA, acknowledged the need for further investigation, stating, “While no bank, building society, or payment firm reported closing accounts primarily due to someone’s political views, further work is needed for us to be sure.” Rathi added that this is an opportune time to discuss how to balance access to bank accounts with the risk of financial crime, as well as address firms’ risk levels and commercial interests. The FCA also raised the question of whether everyone should have the right to an account, as is the case in some other countries. The report also highlighted the potential role of robust digital identities in combating financial crime and promoting financial inclusion.
The FCA has committed to ongoing investigations into account access and closures related to discrimination. The regulator’s future work includes verifying the accuracy of data reported by firms, particularly focusing on outlier cases. They also plan to conduct additional supervisory work to assess firms’ justifications for closing accounts due to political reasons and to analyze accounts closed for reputational risk. The FCA will review declined applications and terminations of basic bank accounts, delve into the reasons behind the 1.1 million unbanked individuals in the UK, and engage with consumer groups to understand the impact of account declines.
Intolerance and cancel culture have become major concerns in the current climate, where financial services firms may be influenced to suppress individuals with unpopular opinions. This issue is not limited to the UK and has sparked debates regarding the erosion of free speech. Farage, who has been affected by this issue, recently criticized the FCA’s findings on X (formerly Twitter), stating, “The FCA says it finds no evidence of politicians being ‘debanked’ over political views. This new report is a whitewash and a joke.”
Farage described the FCA as a highly political organization that is unfit for its purpose. The FCA’s ongoing investigation aims to address these concerns and ensure fair treatment and access to financial services for all individuals.
Follow crowdfundingmagazine on Instagram: @crowdfundingmagazine_it