![](\"http:\/\/ch.jfdi.cc\/wp-content\/uploads\/2024\/03\/fca-signals-watchdog-open-to-ending-to-free-banking-in-britain.jpg\")
Britain\u2019s Financial Conduct Authority \u201cwould not stand in the way\u201d of moves to end Britain\u2019s free banking model if lenders chose to offset rising regulation costs by charging fees for holding accounts, its CEO said.<\/p>\nBritain\u2019s Financial Conduct Authority \u201cwould not stand in the way\u201d of moves to end Britain\u2019s free banking model if lenders chose to offset rising regulation costs by charging fees for holding accounts, its CEO said.<\/p>\n
In remarks prepared for a speech later on Thursday, Nikhil Rathi defended the watchdog\u2019s bid to prioritise retail customer protection via its Consumer Duty rules, and said he had heard concerns that regulation had played a role in increasing pressure on banking business models and margins.\u201cWe have always been clear that if business models need to change in response to competition and a changing market, we would not stand in the way,\u201d he said.\u201c\u2026the \u2018free-if-in-credit\u2019 banking model in the UK is a market and commercial decision not a regulatory requirement, other than for basic bank accounts,\u201d Rathi added, pointing to fee-based approaches in other countries.Consumer interest groups were critical of Rathi\u2019s remarks, with one describing the potential reform as \u201cextremely concerning\u201d.\u201cBanks\u2019 margins are hardly being squeezed, with lenders enjoying record profits driven by higher interest rates which they\u2019ve withheld from depositors,\u201d Simon Youel, head of policy and advocacy at Positive Money, said.\u201cIt is bad enough that banks are cutting access to in-person services with branch closures \u2013 cutting access to free current accounts as well would be another big slap in the face to the public,\u201d he said.Rathi, who has led the FCA since October 2020, said the application of the Consumer Duty could also cut compensation levies imposed on financial firms.The regulator would be \u201cpragmatic\u201d when enforcing those rules, tackling breaches that pose the greatest risk of harm but looking \u201cfavourably on firms that have made reasonable efforts to address concerns\u201d.\u201cWe\u2019re not setting out to trip firms up by going after technical breaches,\u201d he said, underscoring the cash savings market and insurance products such as premium finance and so-called guaranteed asset protection insurance as particular areas of focus.Rathi also said the FCA was aiming to \u201cachieve earlier clarity than previous redress events\u201d on the scale of consumer harm from possible overcharging in motor finance.Some of Britain\u2019s biggest banks have already set aside hundreds of millions of pounds to cover possible redress linked to the FCA\u2019s probe. Some analysts estimate the banks\u2019 potential costs could rise as high as 2 billion pounds ($2.6 billion).\u201cThe more quickly and comprehensively firms cooperate with requests for data, the sooner we can conclude our work,\u201d he said.Rathi also said it was not the regulator\u2019s instinct to seek immediate regulation of advances in artificial intelligence (AI) in financial services.($1 = 0.7804 pounds)Follow the
\nCyprus Mail on Google News<\/p>\n","protected":false},"excerpt":{"rendered":"
Britain’s Financial Conduct Authority (FCA) CEO, Nikhil Rathi, stated the FCA would not oppose changes to the UK’s free banking model if banks decide to introduce fees for account holding to offset rising regulation costs. Rathi emphasized the importance of protecting retail customers through the Consumer Duty rules and acknowledged concerns about regulation increasing pressure on banking business models and margins. He clarified that the current free banking model is a market choice, not a regulatory requirement, except for basic bank accounts. Consumer groups criticized Rathi’s comments, with Simon Youel from Positive Money highlighting banks’ record profits and opposing the reduction of free services. Rathi, leading the FCA since October 2020, mentioned the Consumer Duty could reduce compensation levies on financial firms and stressed a pragmatic approach to enforcing these rules. He highlighted the focus on the cash savings market and certain insurance products, and mentioned the FCA’s investigation into potential overcharging in motor finance, which could lead to significant redress costs for banks. Rathi also mentioned a cautious approach to regulating AI advancements in financial services.<\/p>\n","protected":false},"author":3,"featured_media":4210,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[842,639,1902,611,195,186,1512,1240,464,426,1984,3,274,569,1982,1983,250,899,1401,1419,1806,494],"class_list":["post-4209","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyprus","tag-ai","tag-artificial-intelligence","tag-bank","tag-banks","tag-britain","tag-business","tag-cash","tag-clear","tag-closures","tag-competition","tag-customer-protection","tag-cyprus","tag-depositors","tag-finance","tag-financial-regulation","tag-free-banking-model","tag-google","tag-interest","tag-interest-rates","tag-investigation","tag-services","tag-uk"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n