Bank transparency 'will tackle financial exclusion'

The report – Tackling Financial Exclusion: Data Disclosure and Area-Based Lending Data – was carried out by Coventry University and the University of Newcastle.

The data created a more detailed picture of who our financially under-served communities are and where they are located.

The report is the first attempt to fully analyse the bank lending data and to really understand how it can be used to further increased competition and tackle financial inclusion.

It sets out some key recommendations for how the framework can be strengthened so that it meets its original objectives and becomes a potentially replicable model for other countries to adopt.

The Community Investment Coalition’s Jennifer Tankard said:

“Financial exclusion is a pervasive issue within UK economy and it is recognised that fair and affordable access to financial goods and services is a basic requirement for full engagement in modern society.

“This research is the first real attempt to fully understand the value of the data in tackling financial exclusion.

“If adopted, the report’s recommendations will ensure that the data can uniquely shape approaches to financial exclusion while also setting the standard for other countries if they choose to follow the UK’s lead in data transparency.”

The report found that median personal lending per adult in Great Britain in 2013 was £602.

Lending per adult in the lowest 10% of postcode sectors was around two-thirds of this figure or less, whereas in most of the highest 10% of postcode sectors lending per adult was around a third or more above the median figure. Data suggests that average personal lending tends to decline as the area’s deprivation level rises.

Average median SME lending per business in Great Britain in 2013 was £47,072 with lending per business in the lowest 10 per cent of postcode areas below £35,000 and in the highest 10 per cent of postcode areas lending per business was over £68,000.

The study concludes that the UK is now a world leader in disclosing area-based lending data. But the existing data sets need to be strengthened and broadened to allow detailed and insightful analysis of which of the UK’s communities are underserved by the UK’s main high street banks.