UK FCA and government responses to UK Treasury Committee report on financial inclusion strategy

The House of Commons Treasury Committee has published a report containing the government's and the UK Financial Conduct Authority's (FCA's) responses to the Committee's inquiry report on HM Treasury's (HMT) financial inclusion strategy. In its response, the government agreed with the Committee on the importance of a robust evidence base for financial inclusion policy, including evidence that enables government to assess whether interventions are improving outcomes for people experiencing financial exclusion and are reaching those most in need. However, the government rejected calls to publish a separate quantitative analysis of financial exclusion specifically, stating that this would duplicate ongoing work already undertaken in developing the strategy and would largely reproduce publicly available evidence that has already been assembled and assessed. The response also noted that, as set out in the strategy, HM Treasury will conduct a review within two years to assess the impact of the strategy's interventions. In addition, both the government and the FCA confirmed their view that a broad firm-level financial inclusion metrics regime was not necessary, and the FCA response stated that such a regime would not be the most effective or proportionate means of improving financial inclusion outcomes.

The responses also highlighted a number of new data collection initiatives, including detailed Product Sales Data for consumer credit agreements, which it states will be used alongside advanced analytics to better understand barriers to access. The FCA in addition referred to its new annual Retail Banking Business Models Data return covering mortgages, personal banking, personal lending and small business banking which will help with providing both market-wide and firm-level information about the provision of banking services to consumers and small and medium-sized enterprises.

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