Financial services regulators must take responsibility to address financial exclusion and should be required to promote financial inclusion, according to Responsible Finance and 36 other civil society organisations, charities and public interest groups.
The organisations have published a joint statement in response to the Government’s proposals for the Financial Services Future Regulatory Framework and a Treasury consultation which closes on 9th February 2022.
The joint statement makes six recommendations. In order to ensure regulators act in the public interest, one recommendation is that they should be given new duties to:
“Promote financial inclusion. Despite the UK being a global financial centre, financial exclusion is a serious problem that regulators must take responsibility to address. Around 12 million people in the UK have little options to access credit; over 2 million do not have bank accounts and around 8 million people would struggle in the cashless society we are rapidly moving towards.”
The joint statement was co-ordinated by The Finance Innovation Lab, a charity “working to build a financial system that serves people and planet – one that’s democratic, sustainable, just and resilient.” It comes after a survey by Opinium Research revealed 9 in 10 adults think international competitiveness should not be a top priority for the new UK financial services regulation and instead, the Government’s planned new regulatory framework should focus on the future stability of the financial system, consumer protection and on financial inclusion.
Marloes Nicholls, Head of Policy and Advocacy at the Finance Innovation Lab, said:
“The UK has an opportunity to uphold the global standing of our finance sector by ensuring that future regulation reflects its ultimate purpose – to maximise this critical industry’s contribution to our economic, environmental, and social goals. The government could show international leadership by addressing the gross imbalance in stakeholder engagement with financial regulation by public interest groups versus big finance lobbyists.”
The 37 co-signatories to the statement include the Barrow Cadbury Trust, The Centre for Local Economic Strategies, New Economics Foundation, Positive Money, RSPB, and The Transparency Task Force. A full list is on the statement here.
Signatories also include Fair By Design, publishers with The Financial Inclusion Commission of this open letter (signed by Responsible Finance) to the Government to introduce a statutory commitment for the Financial Conduct Authority (FCA) to take account of financial inclusion as part of the Future Financial Regulatory Framework Review.
Theodora Hadjimichael, CEO of Responsible Finance, said:
“Affordable and fair financial products are essential to participate in society, yet millions of people are excluded from them. Giving the FCA a remit to promote and tackle financial inclusion would help the millions who are excluded entirely or let down by the current market to build their financial resilience.”