Bank account closures since 2016 skyrocket

CHRIS DORRELL

THE NUMBER of bank accounts being closed climbed to nearly 350,000 last year as banks adopted an increasingly vigilant stance towards their customers.

According to data from a freedom of information request submitted by the Daily Mail to the Financial Conduct Authority (FCA), the number of accounts being closed has increased from under 50,000 in 2016 to 343,350 last year. The data covers nearly 250 banks that shut accounts due to financial crime risks. “We have seen firms increase their monitoring of accounts over the past couple of years, which may account for the increase in the figures,” a spokesperson for the FCA said. A spokesperson for bank industry body UK Finance said: “When dealing with financial crime issues firms are often restricted in the information they can disclose.”

The issue of ‘debanking’ has become prominent in recent weeks after the controversial closure of Nigel Farage’s Coutts bank account.

However, some have pointed out that these problems associated with bank de-risking has been ongoing for years.

Back in July 2021 the Treasury Committee wrote to the FCA about the issue of “blanket de-risking”, warning that bank accounts were being closed for “no apparent reason”.

In reaction to the Farage case, the Treasury announced plans to increase the termination notice period to 90 days and require banks to explain why accounts are being closed. Exceptions will be made where the rules conflict with banks’ obligations to clamp down on financial crime.

UK Finance said these were “important changes” and that it will work with the government and regulators on implementing them.