LONDON (Reuters) - HSBC’s Chairman Douglas Flint has warned less well-off customers could lose access to basic financial services if lenders are overburdened by unnecessary regulation.
“I do worry that we are beginning to see the industry move towards serving higher net worth individuals and moving away from the bottom of society,” Flint told the City Week banking conference.
UK Banks have argued that new rules introduced by Britain’s financial regulator in January have made it too expensive to offer advice to many customers.
The rules are meant to ensure advisors are better trained and that fees for financial advice are more transparent.
However, several banks including HSBC have responded by withdrawing advice to customers with less than 50,000 pounds to invest. Flint said overzealous regulation could reverse the expansion of financial inclusion seen in recent years.
“It becomes more and more difficult to sell simple products to the lower income part of society and I think it would be retrograde if we end up effectively making the system safer by excluding the people that we brought into the system,” he said.
Reporting by Matt Scuffham and Alice Baghdjian; Editing by David Cowel