De-banking update – could there be something more sinister going on

Financial repression and growing de-banking concerns

Recent years have seen an increasing debate surrounding the growing number of individuals and businesses facing unexpected bank account closures, frozen funds and restrictions on access to financial services. While financial institutions continue to operate under strict anti-money laundering (“AML”) and counter-terrorism financing obligations, concerns are being raised about the wider consequences of compliance-driven decision-making.

A recent study commissioned by the European Parliament’s Committee on Foreign Affairs reportedly highlighted “financial transnational repression” as an emerging issue, suggesting that financial compliance systems may be vulnerable to misuse by authoritarian regimes targeting individuals located within Europe.

The study also raised concerns regarding “over-compliance” by banks, the growing reliance on compliance databases and Artificial Intelligence systems, and the difficulties individuals may face when attempting to challenge account freezes or closures once decisions have been made.

Against this backdrop, we examine the findings of the recent study, the broader concerns surrounding de-banking and financial compliance measures, and the challenges increasingly faced by individuals seeking to maintain access to banking services.

De-banking developments in the UK

Throughout 2024, 2025 and 2026 we wrote extensively about de-banking in the UK, including articles titled “What are the proposed new laws aimed at preventing de-banking?”, “Why the proposed new laws to try and prevent de-banking do not go far enough”, and, more recently, “De-banking continues to rise in the UK”.

In our last article, we explained that from 28 April 2026 new regulations had come into force in the UK and we detailed the key changes under the new de-banking rules.

Unfortunately, throughout 2025 and 2026, we continued to be approached by individuals who felt that they had been unfairly “de-banked”, which is an incredibly frustrating situation to find yourself in.

We have previously outlined steps that individuals who believe that they have been de-banked can take. This includes making a formal complaint to the relevant bank, accompanied by a Data Subject Access Request (“DSAR”).

Looking more broadly to the EU, we now examine a recent study commissioned by the European Parliament’s Committee on Foreign Affairs, which identified financial transnational repression as “a growing area of concern”.

In brief, what did the study find?

In summary, the study found that authoritarian regimes are increasingly exploiting anti-money laundering and counter-terrorism financing rules to cut EU-based dissidents, activists and political opponents off from banks, and thereby compromise their access to basic banking services.

More specifically:

• Authoritarian regimes are increasingly using financial instruments to cut off their EU-based opponents from payments systems;
• The study described how states abuse Anti-money Laundering and Counter-Terrorist Financing rules;
• State actors spread false allegations of money laundering or criminal activity, prompting banks to restrict access on compliance grounds;
• Once an account is frozen, it can be extremely difficult to reverse this decision, even with expert legal assistance;
• Driven by fear of sanctions or losing licences, “over-compliance” by banks is also blamed as part of the problem;
• The use by banks of Artificial Intelligence in banking compliance systems is said to make banks more susceptible to disinformation campaigns and fake news;
• In response, it has been argued that Europe should ensure reliable access to bank accounts for affected individuals, establish better training with supervisory authorities and strengthen cooperation among financial regulators to implement safeguards.

What can I do to try and challenge a wrongful decision to close my personal and/or business bank account(s)?

In the meantime, we are increasingly being approached by individuals who have been “de-banked” in circumstances where they believe that they have always acted in full compliance with the relevant bank account’s Terms and Conditions and all other legal and applicable rules and regulations.

We have previously written about how other issues which individuals may face, including account closures, are not limited to political figures in the UK and affect many thousands of lawful individual and business customers every year. These cases have exposed the difficult balance many financial institutions and their individual and business customers must navigate to gain and maintain access to basic banking services.

To assist those whose accounts have been closed, Gherson’s Financial Crime, Investigations and Regulatory team have previously written blogs titled:

• “Why has my bank account been closed?”
• “Why has my business bank account been closed?”
• “140,000 SMEs “de-banked” last year – why could I have been de-banked?”
• “What are the proposed new laws aimed at preventing de-banking?”
• “Why the proposed new laws to try and prevent de-banking to not go far enough”
• “Am I entitled to a basic bank account in the UK?”
• “How to challenge crypto-related bank account closures”
• “De-banking and crypto – will the landscape be positively changed by the introduction of new rules for both?”
• “2025 – A year in de-banking”
• “De-banking continues to rise in the UK”

What can I do to try and challenge a wrongfully imposed CIFAS marker?

We are also being increasingly approached by individuals who feel that a financial institution has wrongfully imposed a CIFAS marker in their name.

If you have always acted in full compliance with the relevant bank account’s Terms and Conditions and all other applicable legal rules and regulations, then you should have a good basis to challenge the bank’s decision to implement any CIFAS markers.

A strong challenge will often involve demonstrating, through evidence, that you have not breached the bank’s Terms and Conditions or rules, and that all transactions were at all times done in full compliance will all applicable laws and regulations.

In a previous blog, we examined what a CIFAS marker is and how to try and get it removed, as well as what you can do if a CIFAS marker has been wrongfully imposed.

We have also recently examined Challenging a crypto-related CIFAS Marker: what you can do.

NAVIGATING FINANCIAL INSTITUTION-RELATED CHALLENGES

Adverse information on compliance databases

We are also being increasingly approached by individuals who feel that incorrect and/or inaccurate data stored about them in compliance databases is having an adverse effect on their relationship with financial institutions and who are facing subsequent issues, such as bank account closures or difficulties in opening a bank account. 

We have written a series of blogs covering the main functions of compliance databases like World-Check and how you can correct information about yourself on such databases.

HOW GHERSON CAN ASSIST

Gherson’s Regulatory, White-collar and Investigations team are highly experienced in providing assistance on what you can do if your bank freezes or closes your account. This includes assisting you in submitting a request under data protection legislation, otherwise known as a Data Subject Access Request, to ascertain what information banks and other financial institutions may be holding on you and their decision-making, and then analysing the response and assisting with any appropriate challenge.

If you would like to speak to us in respect of any of the issues raised in this blog or about your specific circumstances, do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on X, Facebook, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2026