FCA conducts separate review
An independent review has found that disclosures made by NatWest Group’s former chief executive Alison Rose “probably amounted to a personal data breach” and that the bank committed “a number of serious failings” in the treatment of its client, Nigel Farage.
The review – conducted by law firm Travers Smith and commissioned by the NatWest Group – looked into the decision to close the Coutts accounts of Farage and the circumstances surrounding a potential breach of confidentiality relating to his customer information when Rose discussed the planned closure of his bank accounts with a journalist in July.
While the review recognised that confidential customer information concerning Farage was conveyed, whether expressly or impliedly, it concluded that there was no leak of the broadcaster and former politician’s specific detailed financial information such as account balances, and that there was no evidence of any other relevant leaks of customer confidential information from the NatWest Group.
“Whilst Travers Smith made certain observations about the risks she should have appreciated in making the disclosures to the BBC, their opinion is that, in doing so, she did not consciously set out inappropriately to disclose the relevant information,” the NatWest Group stated.
Earlier this week, the UK Information Commissioner’s Office (ICO) found that Rose violated the Farage’s data privacy rights by inappropriately and inaccurately sharing the latter’s personal data.
The bank executive was forced to resign amid the debanking scandal. Her exit package of more than £10 million in pay, bonuses, and stock could also be cut by the NatWest board.
NatWest, however, has yet to provide an update on the decision over Rose’s payout.
“As we would with any other employee, we have a duty of confidentiality to Dame Alison Rose,” the banking giant said. “However, given her role as the former CEO of NatWest Group, there is a disclosure obligation in relation to her remuneration. The bank will disclose the relevant outcomes, as soon as possible.”
Decision to close the accounts of Farage found lawful
The Travers Smith review also ruled that the decision to close the accounts of Farage was lawful and did not amount to a direct or indirect breach of applicable laws and was made in accordance with the relevant bank policies and processes.
“The exit decision was predominantly a commercial decision,” NatWest said, reiterating the findings of the independent review. “Coutts considered its relationship with Mr. Farage to be commercially unviable because it was significantly loss-making.
“There were other factors considered as part of the decision-making process. Foremost among those other factors was the risk Coutts perceived to its reputation in the eyes of its stakeholders. But these were not, in Travers Smith’s view, factors that drove the exit decision. Mr. Farage’s public statements on various issues were not a determining factor in the exit decision. Rather, Travers Smith consider them to have supported the decision.”
Reacting to this, Farage, in a post in social media platform X (formerly Twitter), called the NatWest-Travers Smith report “a whitewash.”
The NatWest / Travers Smith report out this morning is a whitewash.
— Nigel Farage (@Nigel_Farage) October 27, 2023
They say my political views “not aligning with the bank” was not in itself a political decision.
They also find no evidence my “pro-Brexit” views were a factor, despite Brexit appearing 86 times in the SAR. pic.twitter.com/dhKeXET3FT
Still, the way the exit decision was communicated to Farage was not in accordance with the bank’s policies and processes, the review found.
“This report sets out a number of serious failings in the treatment of Mr. Farage,” commented Howard Davies, NatWest Group chairman. “Although Travers Smith confirm the lawful basis for the exit decision, the findings set out clear shortcomings in how it was reached, as well as failures in how we communicated with him and in relation to client confidentiality.
“We apologise once again to Mr. Farage for how he has been treated. His experience fell short of the standards that any customer should expect.
“Our job now is to make sure that does not happen again. The bank is committed to implementing all the recommendations made by Travers Smith, and we are making substantive changes to our policies and procedures, in particular to ensure that the lawfully protected beliefs or opinions of customers do not play any role in our decision making.
FCA is conducting supervisory work on the issue
Meanwhile, the Financial Conduct Authority (FCA) has confirmed that it is conducting supervisory work, covering both NatWest Group and Coutts, into how the firms’ governance, systems and controls are working, to identify and address any significant shortcomings.
“As previously set out, we have been intensifying supervisory work in relation to NatWest Group and Coutts since the widely reported events earlier this year,” the regulator said in a statement.
“We have reviewed the findings of the initial independent report, commissioned by NatWest, into decisions on potential account closures and data protection breaches. This report, and additional information we have considered, has highlighted potential regulatory breaches and a number of areas for improvement.
“These include the firms’ processes, systems and controls around how they consider potential closure of accounts and handle complaints from their customers, and the allocation of responsibilities and effectiveness of the firms’ governance mechanisms.”
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