REG - NatWest Group plc - Key findings from Phase 2 of Travers Smith review

NatwestAnnouncement

15/12/2023 09:00

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RNS Number : 9689W  NatWest Group plc  15 December 2023

Key findings from Phase 2 of Travers Smith review

NatWest Group (NWG) has today published the key findings and recommendations
from Phase 2 of the Travers Smith independent review - commissioned by the
Board in July - relating to account closures at Coutts over the 24-month
period prior to 28 July 2023.

The key findings and recommendations report (the report) published today was
compiled by Travers Smith. The Phase 2 review analysed 84 customer account
closures - including all relevant PEP cases exited over the relevant period -
building a total sample of around 10% of relevant account closures in the
period.

The report confirms that decision-making was consistent with relevant
standards and otherwise appropriate and that there was no evidence of
discrimination due to political views or affiliations, or any other protected
characteristic. However, it identifies several areas where Coutts' policies
and procedures governing exit decisions could be improved, including the
process by which exit decisions are communicated to customers and the clarity
of communications.

NatWest Group has accepted - and will implement - all the recommendations
contained in Phases 1 and 2 of the review.

Commenting on the report, Mohammad Syed, Chief Executive of Coutts, said:

"Following the publication of the Phase 1 reports in October, we recognised
the need to improve our customer account closure processes and those
improvements are already well under way. Although Travers Smith confirm that,
in general, decisions were appropriate and that there was no evidence of
discrimination, it is clear there are lessons to be learned. This report
reaffirms that there were a number of shortcomings in our approach to account
closures at Coutts and, in particular, in the quality and consistency of our
communications. The experience of some of our customers fell short of what
they should expect, and we apologise to them.

"We are committed to implementing all of the recommendations made by Travers
Smith, including comprehensively reviewing and updating exit and communication
processes, so that we deliver a better, more consistent experience for all our
customers."

The report sets out Travers Smith's key findings and recommendations in full

https://www.natwestgroup.com/content/dam/natwestgroup_com/natwestgroup/pdf/Travers-Smith-Phase-2-Key-Findings-Recommendations.pdf
(https://www.natwestgroup.com/content/dam/natwestgroup_com/natwestgroup/pdf/Travers-Smith-Phase-2-Key-Findings-Recommendations.pdf)

 

In summary, the Phase 2 findings include:

i.      Decision-making: in general, exit decisions were made in
accordance with relevant bank policies and processes and there was no evidence
of discrimination due to political views or affiliations, or any other
protected characteristic. Decision-making by Coutts in relation to the exit
cases was consistent with relevant standards and otherwise appropriate.
However, Travers Smith found that policies and procedures governing exit
decisions could be improved in some areas.

 

ii.     Exit processes: there is little by way of formal procedure or
process governing how non-financial crime exits must be carried out by Coutts
staff, and there is no formalised set of definitions for the potential bases
for exit or guidance on thresholds to be met for a customer to be exited.
Travers Smith also found that:

 

•     In some exit cases, there were deficiencies in the internal
process followed, and in the content or format of the exit letter or the
process by which that letter was conveyed to the customer;

 

•     In a small number of cases, by not communicating at least 60 days'
notice of account closure to the customer, Coutts potentially breached
Regulation 51(4) of the Payment Services Regulations; and

 

•     Primarily in relation to the failure by Coutts to provide reasons
for exits, Coutts potentially breached FCA rules, including the obligation to
treat customers fairly.

 

iii.    Data protection analysis: the report identified some potential
compliance failures and/or best practice shortcomings in Coutts' data
processing in respect of exit decisions. The report also contains a summary of
Travers Smith's data protection analysis relating to Phase 1 of the Travers
Smith independent review.

In light of the recommendations made by Travers Smith, and its own internal
work, NatWest Group is taking action to ensure better outcomes and experiences
for customers across the bank. The key steps include:

1.    Reviewing and updating exit processes, including a review of exit
letters and the introduction of a commercial exits framework that provides
customers with the opportunity to improve their economic contribution where
appropriate;

2.    The establishment of a new franchise exits process and an appropriate
PEP declassification programme; and

3.    Refreshed guidance and mandatory training on the complaints process
will be issued to the front line, Coutts 24 and all relevant senior leaders.

 

In October, the FCA confirmed that it is undertaking a programme of
supervisory work with NatWest Group and Coutts. NatWest Group will continue to
work with its peers and regulators and with the UK Government so that it is
easier for banks to communicate clearly with customers who are being exited.

--ENDS--

For more information, please contact:

NatWest Group Investor Relations

Alexander Holcroft

Head of Investor Relations

+44 20 7672 1758

 NatWest Group Media Relations

+44(0)131 523 4205

 Legal Entity Identifier:  2138005O9XJIJN4JPN90

 

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include forward-looking statements relating to NatWest Group plc in respect
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impact any forward-looking statement or NatWest Group plc's actual results are
discussed in NatWest Group plc's 2022 Annual Report on Form 20-F, NatWest
Group plc's Interim Results for H1 2023 on Form 6-K, Natwest Group plc's
Interim Management Statement for Q1 and Q3 2023 on Form 6-K, and its other
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speak only as of the date of this document and NatWest Group plc does not
assume or undertake any obligation or responsibility to update any of the
forward-looking statements contained in this document, whether as a result of
new information, future events or otherwise, except to the extent legally
required.

 

 

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