Back to Blog

Understanding UK Banking Regulations: What Expats Need to Know

As an expat living in the United Kingdom, navigating the complex world of banking regulations can be overwhelming. UK banking regulations are designed to protect consumers, maintain financial stability, and prevent financial crime. In this article, we will provide an in-depth overview of UK banking regulations for expats and offer pro tips to ensure compliance.
May 14, 2023 15:10

Quick Summary

What Is The UK Bank Regulatory System?

The UK bank regulatory system is a framework of laws, regulations, and supervisory bodies that are responsible for overseeing the operation of banks in the UK. The regulatory system is designed to ensure the stability and safety of the UK financial system, as well as protect the interests of consumers and investors.

The main regulatory bodies responsible for overseeing the UK banking sector are the Bank of England's Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The PRA is responsible for ensuring that banks, building societies, credit unions, and insurers are financially sound and able to withstand economic shocks, while the FCA is responsible for regulating the conduct of financial firms and ensuring that they treat their customers fairly.

UK Banking Regulation

The UK Banking Regulations 

UK banking regulations apply to all banks and financial institutions operating within the UK, regardless of whether they are headquartered in the UK or overseas. These regulations are designed to ensure that banks and financial institutions operate in a safe and sound manner, protect consumers, and maintain financial stability.

Banks and financial institutions in the UK are regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The FCA is responsible for regulating the conduct of financial institutions, while the PRA is responsible for ensuring the safety and soundness of financial institutions.

To ensure regulatory compliance, banks and financial institutions in the UK are required to have robust systems and controls in place. They are also required to regularly report to the FCA and PRA on their activities and financial position.

Understanding the Financial Conduct Authority (FCA) Regulations for Expats

The FCA is the UK's financial regulator, responsible for regulating the conduct of financial institutions, including banks. The FCA has a number of regulations that apply to expats, including the requirement for banks to identify their customers and the requirement for banks to treat their customers fairly.

Tip: Keep up to date with changes in banking regulations to ensure ongoing compliance.

Banks are required to have systems and controls in place to ensure that they comply with the FCA's regulations. They are also required to regularly report to the FCA on their activities and financial position.

UK Bankinging Laws For Expats

Banking Laws for Expats in the UK 

There are a number of banking laws that apply to expats in the UK, including the Money Laundering Regulations, the Proceeds of Crime Act, and the Terrorism Act. These laws are designed to prevent financial crime, such as money laundering and terrorism financing.

Expats who are found to be in breach of these laws may face fines or even imprisonment. It is therefore important for expats to ensure that they understand these laws and comply with them.

Tip: Expats should research and compare different banks and their policies before choosing a bank to ensure the best fit for their needs.

What are the Banking Requirements for Expats in the UK?

Expats who wish to open a bank account in the UK are required to provide certain documentation, including proof of identity and proof of address. Banks may also require additional documentation, depending on the type of account being opened.

Here are the typical banking requirements for expats to open a bank account in the UK:

Pro Tip: Consider using an international bank account designed for expats.

Expats who are not resident in the UK may find it more difficult to open a bank account, as banks may require proof of a UK address. However, there are some banks that offer international bank accounts, which are designed for expats and non-residents.

UK Banking Restrictions

Expat Banking Restrictions in the UK

As an expat living in the UK, there are a few restrictions regarding your banking options:

Those are some of the common restrictions and rules that expats should keep in mind regarding banking options in the UK. Be sure to discuss your specific situation with banks to determine your eligibility and ensure there are no surprises.

UK Banking Compliance for Non-UK Citizens

Expats are still required to comply with UK banking regulations when opening a bank account in the UK. This includes providing proof of identity and proof of address, as well as complying with anti-money laundering regulations.

Pro Tip: Keep up to date with changes in banking regulations to ensure ongoing compliance. Expats should be aware of the potential for fraud and protect their personal information.

What Happened If Expat Failed to Comply with Banking Rules in the UK? 

Expats in the UK must comply with UK banking rules and regulations when opening a bank account or conducting financial transactions. Failure to comply with these rules and regulations can result in several issues.

  1. Account closure. If an expat fails to provide required documentation to verify their identity, income source, origin of funds etc. to open an account, the bank is within their rights to refuse account opening or even close an existing account. Expats would then lose access to their funds and ability to transact through that account.

  2. Penalties and fines. Regulatory authorities like the FCA in the UK can penalise banks that fail to properly apply rules regarding expat accounts or if they detect suspicious activity. These penalties may be passed on to the expat account holder in some cases. Fines for non-compliance can be substantial.
  3. Legal trouble. Knowingly providing false information or documentation to open an expat bank account to hide illicit funds can lead to criminal charges of fraud, forgery or money laundering against the expat. They may face legal prosecution, hefty fines and even imprisonment.

  4. Restricted access. If an expat is found not fully complying with rules around remittances, international transfers, proof of income/funds source etc. the bank may place certain restrictions on the account like limiting withdrawals/transfers, capping account balances, monthly withdrawal limits etc. Some banks may also report non-compliant accounts to authorities.

Pro Tip: Expats should research and understand UK banking rules and regulations to ensure compliance.

  1. Funds seizure. In cases of suspected criminal financial activity like money laundering using an expat bank account, regulatory authorities have the power to freeze account funds, seize assets or launch investigations that could lead to funds/assets being confiscated. Expats would lose access to their money in such scenarios.

  2. Damage to credit score. Being flagged as non-compliant by banks regarding financial rules can potentially damage an expat's credit score and reputation, making it difficult to get other financial services like mortgages, loans, credit cards etc. in the future.

  3. Difficulty with future accounts. Expats who have faced penalties, legal issues or had accounts closed due to failure to comply with rules may find it challenging to open new bank accounts in the UK as banks will likely view them as a higher risk customer. They may face more scrutiny, restrictions and barriers.

In summary, expats must make sure they fully understand and abide by all regulations regarding their UK bank accounts to avoid facing these compliance issues, penalties, legal trouble, access restrictions or reputational damage to their finances. 

Ask banks for clarification on any rules you are unsure about. Provide complete and accurate information at all times. And monitor accounts regularly for any unauthorised activity or signs of fraud.

UK's Financial Ombudsman Service (FOS)

Understanding the UK's Financial Ombudsman Service (FOS) for Expats

The Financial Ombudsman Service or FOS is an independent organisation for resolving disputes between consumers (including expats living in the UK) and financial businesses such as banks, insurers, investment firms, etc. 7 key things to know about the FOS for expats:

  1. Free service. The FOS is free to use for expats. They do not charge any fees to investigate a complaint.
  2. Covers banking, insurance and investments. The FOS handles complaints about a wide range of financial services including problems with bank accounts, mortgages, insurance claims, investments, pensions, etc. So expats can use them for issues with any of these products.
  3. Must first complain to the financial firm. Expats are required to first complain directly to the financial company regarding the issue before contacting the FOS. Only if the company does not resolve the complaint satisfactorily can the expat escalate it to the FOS.
  4. Available for residents and non-residents. The FOS services are available for both UK residents and non-resident expats living in the UK with a financial complaint against a UK-based financial business. So expats can use them even if they are not permanently settled in the UK.
  5. Impartial and unbiased. The FOS adjudicates complaints in a fair and unbiased manner based on the facts of each case. They are independent from any financial companies and governments. So expats can expect a transparent and impartial review of their complaint.
  6. Non-binding and binding resolutions. The FOS can facilitate both non-binding and legally binding resolutions. A non-binding resolution seeks to negotiate a mutually agreeable solution. A binding resolution involves a formal judgement that the financial company is legally required to comply with. Expats can choose either option.
  7. Compensation up to £150,000. In cases where the financial company is found at fault, the FOS can require them to pay compensation of up to £150,000 to the expat complainant to cover financial loss, inconvenience, or distress.
Expats should familiarise themselves with the FOS and how to contact them in the event of a dispute with their bank or financial institution.

The Financial Ombudsman Service (FOS) is an independent organisation that helps resolve disputes between consumers and financial institutions. Expats who have a complaint about their bank or financial institution can contact the FOS for assistance.

UK Banking Regulations For Foreign Currency Accounts

What are the Regulations To Open Foreign Currency Accounts in the UK?

Expats who wish to open a foreign currency account in the UK are required to comply with UK banking regulations. Banks may require additional documentation and may charge fees for foreign currency accounts.

Foreign currency accounts in the UK are subject to certain regulations that expats should be aware of:

Banking Regulations for UK Expats Living Abroad

UK expats living abroad may still hold bank accounts in the UK. However, they must comply with UK banking regulations and may face additional challenges.

Expats living outside of the UK also need to be aware of regulations regarding their UK bank accounts. While they may reside abroad, the funds in their accounts remain subject to UK laws against money laundering, terrorist financing, and fraud. Expats with UK accounts must disclose that they live overseas, provide additional proof of identity and income sources, limit large international transfers and remittances, report any foreign income or assets, and ensure any UK-based standing orders, direct debits or bill payments continue to be authorised from a verified UK source of funds (e.g. salary payments).

UK expats living abroad should research and understand the requirements for maintaining a UK bank account while living abroad.

Though expat accounts may have fewer restrictions than resident expat accounts, strict rules still apply to prevent illegal activity and ensure transparency. Compliance is important to avoid penalties, legal issues, frozen accounts or even closure of financial relationships with UK-based banks.

UK banking regulations apply to expats wherever they live across the globe. Expats with UK accounts must remain vigilant of their compliance responsibilities regarding source of funds, limiting suspicious activity, reporting foreign income and increases in net worth, and the general prohibition of using UK accounts for illegal purposes.

Banking Compliance for UK Expats Moving Back Home

UK expats who are returning to the UK may need to open a new bank account or reactivate their existing account. They must comply with UK banking regulations and provide proof of identity and proof of address.

Post-Brexit Financial Regulations for Expats in the UK 

Following the UK's exit from the European Union, there have been changes to financial regulations that may affect expats living in the UK.

The Brexit process and the UK's withdrawal from the EU has introduced some changes to financial regulations affecting expats living in the UK. Here are the key things expats should know:

While full clarity remains to be seen on all post-Brexit financial rules for expats, some regulations have already changed or may change in the coming years. Carefully following developments, reviewing offerings from financial service providers, and being proactive about compliance responsibilities across borders are the best ways for expats to navigate post-Brexit financial regulations affecting them.

A comparison Between Banking Regulations For Expats In UK and Other Countries

Banking regulations vary between countries, and expats should research and understand the regulations in the country they are living in. Here is a comparison of banking regulations for expats across some major countries:

United kingdom:

United States: 

Europe (EU Countries):

In summary, while regulations in each country aim to achieve a balance between financial inclusion and integrity, the UK typically places more controls and imposes stricter rules on expats compared to the more open EU or US regimes. But regulations also depend on an expat's specific financial profile, needs, and type of banking relationship/transactions. Complying with the rules of each country is key to avoiding issues across borders.


Understanding UK banking regulations is essential for expats living in the UK. Expats must comply with regulations to avoid fines or legal issues. It is important for expats to research and understand the regulations to ensure compliance when opening a bank account in the UK.