FCA to investigate bank account closures

Following this announcement, the Financial Conduct Authority aims to understand the extent of account closures and the main reasons for them. Furthermore, the focus of the request is set on recognising the extent of denial, suspension, as well as the termination of accounts by seeking the needed data and information for building a detailed view of the issue. 

The FCA will also share its analysis with the chancellor. Firms, financial institutions, and companies have until the 25th of August 2023 to provide a range of data that covers the number of personal accounts, as well as business accounts that banks hold, and the number of accounts they opened. 

Moreover, the enterprises will need to offer the Financial Conduct Authority information on whether the accounts were denied, suspended, or terminated, and the reasons for each of the situations. This includes situations such as if the accounts have been closed because of different expressions of opinions. The FCA will enquire about both personal and business clients, such as political parties, charities, or pawn brokers.

The data is expected to cover the period between the 1st of January 2022 to the 30th of June 2023 and to be broken down into H1 2022, H2 2022, and H1 2023. 

FCA’s recent launches

At the beginning of August 2023, the Financial Conduct Authority set out an action plan that consisted of 14 steps, focused on cash savings. The plan aimed to ensure that banks and financial institutions communicated and passed on interest rate rises to customers and users in an appropriate manner. 

The plan followed a review that was made on the cash savings market earlier this year, as well as a roundtable that was held with banks at the beginning of July. After the review was released, the FCA found out that as interest rates on savings accounts rose, the process took place more slowly for easy-access accounts. Moreover, there was also a significant variance between firms, with smaller companies offering overall higher interest rates on average compared with other large institutions and enterprises. 

Companies that offered the lowest saving rates needed to justify how those rates gave fair values by the end of August 2023. The focus was also on the benefits that could be provided to clients from competitive interest rates, for protecting the value of their savings, and for receiving fair value from firms, as required by the Consumer Duty. The 14-point action plan included other features as well, such as an analysis of the difference between on-sale and off-sale products, reviews of the companies’ performances on cash ISA and cash ISA switching, and more. 

Earlier in July 2023, the FCA published the feedback statements for its 2022 Discussion Papers, that was focused on the competition impacts of Big Tech entry. This aimed to gain insights into areas where the entry of Big Tech could provide the biggest competition benefits for clients, as well as regions that were the most vulnerable if competition did not develop effectively.