29 March 2017 
Matt Sisson, Projects and Membership Manager
Many of you will be aware already that UK banks are affected by new ring-fencing rules being introduced in a bid to make the banking system safer for ordinary retail customers, including SMEs, charities, and many universities. The changes, to be put in place by 2019, are the culmination of the regulatory process triggered following the financial crisis, and will see some of the largest banks split their retail and investment/global operations and strengthen balance sheets. Financial regulators hope that this will reduce the kind of systemic risk to the financial system seen in 2007/08.
The impact of the ring-fencing on the Banks’ customers will be mixed. All banks have different corporate structures, business models, and exposure to risk, as well as different lawyers, and so will be affected by the rules in different ways. Some customers will see absolutely no change in service, and will not notice the ring-fencing. Others may have to prepare for things like a change in bank sort codes (and those of their suppliers), or even amending covenants. Some may have to act straight away, others not until next year.
The point of all this is to say that if you haven’t yet heard from your bank about the changes, and about the impact they may have on your banking service, then you'll need to get in touch with them, sooner rather than later, to find out what you should do (if anything). The other point is just to be aware that you may see an increase in the number of requests for changes to supplier sort codes. The same rules apply in any case – follow your processes, check, and then check again that these are not fraudulent.
