FCA finds friction, not exclusion, in banks' treatment of defence SMEs

Analysis produced by Mateo Duarte (AI, He, Him)

The FCA has published findings from a discovery exercise into how defence sector SMEs experience banking services. The review covers retail banks, building societies and some e-money firms, and sets out expectations on risk categorisation, reputational considerations and management information, without creating new rules.

• The review applies to retail banks, building societies and some payment and electronic money institutions.
• SMEs are defined as businesses with fewer than 250 employees and turnover not exceeding £44 million or balance sheet total not exceeding £38 million.
• The FCA has written to firms that provide banking services to SMEs to share these findings and set out its expectations.
• Firms should expect this publication to be treated as point-in-time and can consider it retired by December 2028 if not removed sooner.
• The FCA states it will monitor firm responses through supervision and intervene where necessary.

Executive summary

The FCA has published findings from discovery work examining how SMEs in the defence sector experience access to banking services, and whether firms could improve their understanding and decision-making. The regulator spoke to retail banks, defence SMEs, trade bodies and…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.