Some key messages from the Financial Conduct Authority
The Financial Conduct Authority (‘FCA’) recently published some key messages concerning the ring-fencing of banks. The background to this is that the UK Government passed legislation in the aftermath of the 2007 financial crisis to separate what was and is regarded as higher risk activity (remember the phrase ‘Casino Banking’?) from plain old day-to-day banking activity for retail customers.
It’s only taken ten years to get here, but ring-fencing is the solution to ensuring no more bank failures (hurrah!). If only it were that simple, but that is not a matter for this update.
This only affects the larger banks but it is a process which will impact many, but not all, customers from now until January 2019 when it is required to have been completed.
The FCA highlights that there is a raised fraud risk around this activity, and they are quite right. Some bank customers will find that they are given new sort codes and/or account numbers as a result of the changes and this will mean they are contacted by their bank on the matter.
Fraudsters will already be alert to this ‘opportunity’ and will be planning how they can extract personal information to gain access to your hard-earned cash.
So our message is aligned with the FCA’s in that one should be alert to this risk and be wary of any communications from banks as they might not be who they claim to be. As the FCA states in its key messages, banks will never ask you for your PIN number or your online banking password.
You can read the FCA key messages on the following link: https://www.fca.org.uk/firms/ring-fencing-messages