FCA formalises annual retail banking data reporting: what banks and building societies need to do now

The R2B2 return applies to banks and building societies that provided services to retail customers in the UK in the relevant reporting period, were required to submit Annual Financial Crime Reports for their last three accounting reference periods and reported at least 200,000 UK customer relationships in all of them, and reported total revenue of £5 million or more at all of their last three accounting reference dates.  Following consultation, the FCA now estimates 36 firms will be in scope for 2026, with 8 of them newly in scope — an increase from its earlier estimate of 33 firms.

The return has two elements: a Core Financial Data Request, which splits the business model into 7 sections covering five product-level areas (residential mortgages, personal banking, personal lending, small business banking, and other business banking), as well as wholesale funding and whole business measures.  

The second element is an Off-the-shelf Document Request for readily available documents from firms, including product offerings, internal financial reporting and business plans that provide narrative and context to the quantitative data.

The FCA has removed the formula-driven reconciliation between product-level data and the whole-business Profit & Loss and has renamed that section "whole business" to better reflect its purpose.  The off-the-shelf document request has been streamlined to focus more on the business as a whole rather than individual products, firms may submit extracts where appropriate, and there is no requirement to re-submit documents already provided to the FCA.

The return must be submitted by the ring-fenced parent firm if there is one; otherwise, the UK banking parent firm must submit it; and if the group contains neither, any firm in the group may submit on behalf of the others.  The FCA has amended the rules so that for the whole business and wholesale funding sections, ring-fenced parent firms and UK banking parent firms may include data for all entities within their relevant group accounts, and product-level data must relate only to UK customers of the relevant regulated entities.

Where a firm does not hold data and cannot obtain it, the rules permit the use of reliable estimates; and where firms cannot allocate data to specified sub-products, they may submit it as unallocated data.  Firms are required to set out the methodology used to make any estimates and should use the comments fields to draw the FCA's attention to estimation uncertainty or particular methodological points, which the FCA will record in a caveat log for use when conducting analysis.

Small business banking and lending data is a key component of the return, giving the FCA unique insights into whether SMEs are getting fair value or access to affordable credit, given SMEs' role as a key driver of UK economic growth.  The FCA has confirmed it will not aggregate small and non-small business data, since small businesses have distinct products, conditions and outcomes, and disaggregated data is essential for understanding and monitoring the market effectively.

The Retail Banking Business Models Report must be submitted once each calendar year by the end of the last business day of November.  Where the November 2026 timeline could be particularly burdensome, for example for firms not in scope for any of the previous ad hoc collections, those firms can apply for modifications or waivers in the usual way, though the FCA will only approve an application if it meets the applicable statutory tests.

The FCA will share R2B2 data with other regulators where appropriate, including the Prudential Regulation Authority (PRA) and the Competition and Markets Authority (CMA), and will continue to liaise with the PRA on its Future of Banking Data programme.  When publishing anonymised statistics and insights, the FCA has confirmed it will remain mindful of the risks around aggregation of commercially sensitive data and will take steps to mitigate any reidentification risks.

All but one consultation respondent welcomed the FCA's proposal to publish a set of aggregated statistics and insights each year, noting that these would be valuable for cost-benefit analysis, benchmarking and financial inclusion purposes.  Several firms noted the need for the FCA to anonymise data carefully to ensure no commercially sensitive data can be identified as relating to a specific firm, particularly when combined with publicly available data.

The FCA will review the collection after five years and, if it does not reflect up-to-date business model structures, for example due to new products and services emerging from innovation, it will remove or add data points as necessary.  In the meantime, the FCA will monitor the impact of this change on firm burden through its surveys and industry engagement.