May 24, 2016 / 9:21 AM / a year ago

UK watchdog study finds cautious banks ditching customers

LONDON, May 24 (Reuters) - Banks have been ditching customers as they face tougher capital requirements and stricter rules to crack down on money laundering, an independent study for Britain’s markets watchdog said on Tuesday.

The Financial Conduct Authority (FCA) commissioned the study to look into businesses being denied acccess to banking as lenders “de-risk” in the face of new rules.

“As a result, many banks have undertaken a strategic review of their business and functions, often choosing to focus on their ‘core’ business,” the study from John Howell & Co found.

Some banks are closing accounts for money transmission services, pawnbrokers, fintech companies, and charities operating in geographical areas perceived to present greater money laundering and terrorist financing risks, it added.

De-risking seems to affect small businesses more than large ones, the study found.

The FCA said the study showed that de-risking was due to multiple reasons with no “silver bullet” answer. (Reporting by Huw Jones, editing Caroyn Cohn)

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