Access to financial services in the UK: A guide for defence and security

The current geo-political environment, including ongoing conflicts, has thrown a spotlight on the necessity and value of maintaining a resilient and thriving defence and security industrial base in the UK. In turn, this requires UK-based financial products and services to enable businesses to operate, invest, innovate, and grow.

To support both the financial services and defence sectors in navigating a complex regulatory landscape, ADS and UK Finance have collaborated on an Access to Finance Guide: aiming to ensure defence and security businesses have the tools and knowledge they need to innovate, scale and grow.

CHIEF EXECUTIVE OFFICERS FOREWORD FROM ADS GROUP AND UK FINANCE

As UK Finance and as ADS, we are honoured to represent our world-leading industries, and proudly advocate for their ability to operate within robust regulatory frameworks. The UK’s world-leading financial services sector is renowned for its strong regulatory framework, all while being committed to ensuring that financial services can play an essential role in international security. ADS members deliver innovative and entrepreneurial solutions to combatting global geopolitical challenges, all while adhering to strict international regulatory protocols.

Our member businesses have clear collaboration opportunities, and this document serves to empower our respective industrial bases to deliver stricter, more streamlined adherence to overcoming regulatory burdens. By reducing the perceived burden of regulatory adherence at the get-go, we hope to deliver a stronger, more collaborative and inclusive risk environment.

Collaboration between the ADS Group and UK Finance, demonstrated in part by this joint guide, aims to ensure defence and security businesses have the tools and knowledge they need to innovate, scale and grow.

Kevin Craven, CEO, ADS Group
David Postings, CEO, UK Finance

DEPARTMENT FOR BUSINESS AND TRADE FOREWORD

Access to finance is one of the key enablers for growth. The UK is fortunate to have a world-leading financial services sector, which facilitates payments and channels investment to the rest of the economy. For too many businesses however, even accessing basic banking services is fraught with difficulty.

According to my Department’s Inward Investment Client Insight Survey, 56% of new investors to the UK reported setting up a bank account as their biggest challenge. Similar issues are faced by some domestic companies, particularly those in sensitive sectors such as defence. This caution on the part of banks reflects stringent requirements designed to prevent money laundering and other forms of financial crime, with significant penalties for non-compliance.

The regulations that seek to prevent money laundering, breaches of sanctions and other illegal activities also require banks to keep their concerns confidential. If the ‘red flags’ were widely known, it would not take long for criminals to work out how to avoid raising suspicion. However this prohibition on ‘tipping-off’ is understandably frustrating for genuine businesses, who are keen to resolve the unknown difficulties that are delaying or preventing their account from being opened.

In short, even where all parties involved are acting transparently and ethically, there may be factors that prevent a bank account from being opened, or lead an existing account to be closed. Tackling this requires a united approach and I commend UK Finance and ADS for their collaboration on the issue. This guide is an excellent start.

Through the Economic Crime and Corporate Transparency Act, which recently became law, we are improving the ability of banks, law firms and accountants to share information with each other. The same Act also gives Companies House new and enhanced powers to improve the quality and reliability of data, including proper identity verification for all company directors and persons with significant control.

With continued collaboration and dialogue I am confident that we can further improve the experience for defence companies of opening and operating a bank account, contributing to the government’s goal of making the UK the best place in the world to start and grow a business.

Kevin Hollinrake MP
Minister for Enterprise, Markets and Small Business – Department for Business and Trade

Download guide here – or read below