The Financial Inclusion Commission and Fair By Design is calling on the Government to introduce a statutory commitment for the FCA to take into account financial inclusion across the board as part of the Future Financial Regulatory Framework Review.
The Commission and Fair By Design believe that everybody should have access to financial products and services that meet their needs over the course of their lifetime. For this to happen the market needs to be able to accommodate the specific needs of people on low incomes and with certain characteristics, such as those with a physical disability or experiencing poor mental health – regularly referred to as consumer vulnerabilities. However, the market has evolved so that those who often have the least resources and are most vulnerable:
- struggle to afford, or pay extra for, appropriate products and services because they are deemed to be a higher risk/not as desirable to serve;
- are not able to access products and services that meet their needs because they are deemed to be ‘non-standard’;
- are excluded altogether.
The Financial Conduct Authority (FCA) has a range of powers and tools that it uses to regulate the market. These include its statutory objectives as well as the Treating Customers Fairly outcomes and its Public Sector Equality Duty. Despite all of this, it still does not have a clear duty or cross-cutting ‘must have regard’ provision to tackle financial inclusion. The new FCA Consumer Duty will not address this issue either.
We want a clearer remit placed on the regulator to ensure it routinely and properly explores financial inclusion issues across its work, allowing greater clarity on the unintended consequences of regulation, the best interventions needed to ensure financial inclusion, as well as who is best placed to act. This will sometimes be the FCA, the Government, or a mixture of institutions working together.
We believe that the Future Financial Regulatory Framework review provides an appropriate vehicle to achieve this and it is currently open for consultation. The FCA has a huge opportunity here to help those who are being let down by the current financial market, but they need the Government to introduce this duty.
Join our campaign by signing our open letter here.