New research from Fair4All Finance finds that people from minority ethnic groups experience discrimination and multiple barriers to accessing financial services in the UK.
The goal of the research was to improve the understanding of the financial lives and needs of people from minority ethnic groups. Fair4All Finance believes that it can help transform the financial system through investment, research, and partnerships – so that everyone has access to the right products and services, whenever they need them.
The report finds:
- People from minority ethnic groups face greater exclusion from the financial system right now
- People from minority ethnic groups experience higher levels of discrimination and face multiple barriers to accessing mainstream finance
- It doesn’t have to be like this – there are clear solutions and practical ways to address discrimination and improve financial wellbeing
- This is an opportunity for the UK financial service providers to accelerate work on improving financial inclusion
The new report into how ethnicity influences access to financial services in the UK finds that people from minority ethnic groups experienced higher levels of discrimination and face multiple barriers to accessing mainstream finance, including a lack of trust, a ‘one size fits all’ solution, alack of transparency around decision making, and a lack of cultural representation.
The ‘Levelling the playing field’ report also finds that people from minority ethnic groups hold fewer financial products that help build resilience, experience more life events, and are less likely to have positive interactions with banks.
Sacha Romanovitch OBE, CEO of Fair4All Finance, says:
“The findings from this research are stark – right now people from minority ethnic groups in the UK face greater exclusion from the financial services system. It’s clear that change is needed, and it’s needed now. Our Calls to Action and practitioner group provide an opportunityfor the UK banking sector and other financial service providers to accelerate their work on improving financial inclusion and ensure the needs of all communities are met.
“We’re grateful to all of the organisations and individuals who supported and contributed to this research. We hope the findings will inspire everyone working in the sector to take further steps towards greater equity and inclusion.”
The research commissioned by Fair4All Finance was undertaken by IPSOS and found that 22% of those from minority ethnic groups have experienced discrimination due to race when dealing with financial providers, with qualitative research from ClearView Research hearing lived experiences of people from these groups being treated with overt suspicion and even being accused of lying. Those more likely to be financially disadvantaged were more likely to experience discrimination.
The research also found that:
- 45% of people from minority ethnic groups have looked for help from a financial provider on a topic such as setting up an account, or transferring money, compared to 25% of white people
- 45% of white people had a ‘very positive’ experience after seeking help, that number dropped to 29% among people from minority ethnic groups
These findings are true across age groups, and for both respondents born outside and inside the UK. In many cases, people’s experiences were worse when English was not their first language.
Fair4All Finance has also convened a practitioner group, including some of the UK’s largest banks and building societies, which will collaborate to turn recommendations from the report into actionable solutions.