LONDON, September 23 — The Financial Conduct Authority has told the Treasury Committee it will not back a broad firm-level financial inclusion metrics regime, marking the central point of divergence between the regulator and the committee in responses published on 18 September. The bottom line: the FCA supports better evidence and transparency, but argues that firm-level comparisons can mislead. Financial exclusion, it says, results from a range of supply-side and demand-side factors.
The Treasury Committee published the Government’s and the FCA’s responses to its Financial Inclusion Strategy on 18 September. The publication follows the committee’s earlier report on financial inclusion, to which both bodies have now formally replied.
The Government set out its responses to the committee’s recommendations in its published reply.
What the FCA says it has done
The FCA said it welcomes the Treasury Committee’s report and emphasised that improving financial inclusion requires coordinated action across government, regulators, industry and the voluntary sector. Since the launch of the Financial Inclusion Strategy, the FCA said it has supported implementation through a range of initiatives, including pilots to improve access to insurance and work to expand access to affordable credit. It has also encouraged referrals between mainstream lenders and alternative providers, and continues to promote innovation through its Innovation Services.
A key focus of its own strategy, the FCA said, is helping consumers navigate their financial lives, supported by the Consumer Duty and a particular emphasis on vulnerable consumers. Recent work includes mystery shopping of Basic Bank Account providers, which resulted in commitments by participating banks to improve consumer access.
The FCA is also supporting the independent review of access to banking services and promoting the growth of the mutuals sector.
The evidence question
On evidence, the FCA agrees that robust evidence should underpin financial inclusion policy. It highlights the importance of the Financial Lives Survey, with the next survey results due in early 2027. It also points to significant new data sources, including detailed consumer credit sales data introduced in 2025 and a new annual Retail Banking Business Models Data return covering institutions representing around 97% of the market.
But the regulator draws a line at the committee’s proposal for a broad firm-level financial inclusion metrics regime. It argues that financial exclusion results from a range of supply-side and demand-side factors and that firm-level comparisons can be misleading.
Instead, the FCA favours a proportionate, system-wide approach based on targeted data collection, consumer research, innovation and collaboration with government and industry to improve outcomes. Investors will note that the disagreement over firm-level metrics is the central point of divergence between the committee and the FCA in the published responses.
The responses were tracked and reported by Global Regulation Tomorrow, a blog covering financial services regulatory developments across Africa, Asia, Australia, Canada, Europe and the United States, including banking and capital adequacy regulation, clearing and settlement, anti-money laundering, insurance, regulation and compliance, retail and wholesale conduct and securities regulation. What to watch next: whether the committee presses the FCA on its refusal to adopt firm-level metrics, and how the regulator’s system-wide approach translates into measurable outcomes when the next Financial Lives Survey results land in early 2027.
