The FCA has published a speech, delivered by Nikhil Rathi, FCA Chief Executive, on 19th September 2024, at StepChange Connected 2024 at the Aspire building in Leeds. Rathi noted that the building was previously Yorkshire Penny Bank Head Office, a bank founded by Colonel Edward Akroyd in the mid-1800s. Akroyd’s vision was to let anyone open an account – even with a penny. Rathi made the point that Akroyd grasped that financial inclusion isn’t just a moral issue, but also an economic one.
The key highlights from the speech are:
- Financial inclusion and growth need not be mutually exclusive.
- There cannot be genuine financial inclusion without digital inclusion.
- This will require a change in mindset, a different conversation about risk and innovation, and a systemwide effort – not just for government and regulators, but also for employers and schools.
In relation to financial inclusion, published research suggests a causal link – it appears both ways – between improving financial inclusion and economic growth. To date, this research has been limited and focussed on developing economies. Some evidence suggests economic growth and wealth creation can in turn bolster financial inclusion, but there is further work to be done to inform the debate. But a fundamental change in mindset will be needed, focusing not just on products, but on what customers actually need and putting systems in place that deliver those in the long term.