Defence SMEs: access to banking services

For compliance teams, the message is not a new rulebook but a supervisory expectation to test whether policies, customer risk models and front-line decision-making produce blanket de-risking or inconsistent outcomes for legitimate defence-related businesses. Firms should assess onboarding and ongoing monitoring journeys for defence SMEs, document risk-based rationale for exits or enhanced due diligence, and ensure relationship managers and analysts understand dual-use, export-control and sanctions nuances. Actionable steps include a targeted policy and controls gap assessment, review of sector-specific risk appetite and escalation paths, staff training, clearer customer communications, and board-level oversight of de-risking metrics.

Banks that get this right can improve consistency, reduce conduct and reputational risk, and preserve a viable defence SME customer segment while maintaining robust financial crime controls. No specific implementation deadline is stated, but affected firms should prioritise review in the next supervisory cycle.