An independent review into how NatWest handled the closure of politician Nigel Farage’s Coutts account uncovered potential regulatory breaches by the bank that are on the radar of the U.K. Financial Conduct Authority (FCA).
On Friday, NatWest published the key findings and recommendations from the review by law firm Travers Smith it commissioned in July amid widespread criticism regarding its apparent decision to close Farage’s account over his political views. The issue was exacerbated by the actions of NatWest’s now-former Group Chief Executive Alison Rose, who told a BBC reporter Farage had his bank account canceled because he didn’t meet the necessary wealth criteria.
Farage uncovered and published evidence otherwise, and Rose resigned, along with the head of Coutts. The FCA expressed its concerns on the matter by launching a review into the treatment of U.K.-based politically exposed persons (PEPs) by financial institutions.
The Travers Smith review took two forms, focusing on the Farage account closure and the potential breach of his confidentiality by Rose. It found the way in which Farage was exited to be lawful and carried out in accordance with bank policies and processes but noted shortcomings in how the decision was reached and communicated and regarding the treatment of his financial information, according to NatWest.
The bank said it accepted the findings and would implement all recommendations put forward by Travers Smith, including a review into how exit decisions are made, how PEPs are classified, and how reputational risks are considered.
“We apologize once again to Mr. Farage for how he has been treated,” said NatWest Group Chairman Howard Davis in a statement. “His experience fell short of the standards that any customer should expect. Our job now is to make sure that does not happen again.”
The FCA said in a statement it reviewed the findings of the report and that its contents, in addition to the regulator’s own findings, highlighted potential regulatory breaches and areas for improvement regarding:
- NatWest’s and Coutts’s processes, systems, and controls around how they consider potential closure of accounts and handle complaints from customers; and
- The allocation of responsibilities and effectiveness of their governance mechanisms.
The FCA said it is now reviewing how NatWest’s and Coutts’s governance, systems, and controls are working to identify and address any significant shortcomings.
The regulator did not provide any indication as to whether it would penalize either of the firms.
NatWest might also have the Information Commissioner’s Office to deal with, as Travers Smith found Rose’s disclosures to the BBC reporter “probably amounted” to a personal data breach under the General Data Protection Regulation.
The law firm is continuing its review by examining a wider sample of Coutts’s account closures over the last two years.