// FEATURE //

THE LSB WAS FORMED TO MAKE SURE PEOPLE WERE PROTECTED FROM FINANCIAL RISK IN AREAS NOT COVERED BY STATUTORY REGULATION. ANY OBSERVER OF OUR RAPIDLY CHANGING FINANCIAL SECTOR CAN SEE THAT SUCH PROTECTIONS ARE STILL NEEDED. areas not covered by statutory regulation. It has placed pressure on other firms that recognised the value of registration but found it harder to justify engagement without the continued participation of major high street lenders. And it has ultimately undermined the commercial viability of the LSB’ s Standards and Codes – affecting not only the customers of those who withdrew, but also those served by firms that remained committed to independent oversight.”

Tackling gaps in oversight and inclusion for SME customers

In 2024, the LSB’ s review of the business standards’ implementation identified 102 areas of non-compliance across registered firms, potentially exposing SMEs to material risks. Key issues included the treatment of customers in financial difficulty or vulnerable circumstances and firms’ governance. More than two-thirds of these findings have so far been addressed. But without the business standards these risks would likely have gone unnoticed and unresolved.

Protections for ethnic minority-led SMEs now paused

In 2025, the LSB’ s work on ethnic minorityled businesses – with strong support from business groups and policy-makers – exposed systemic barriers to accessing financial services. This was evidenced by independent research revealing: just 19 % of UK ethnic minority-led businesses applying for lending products in the last 12 months had their application accepted for the full amount, compared to 58 % of white British-led SMEs; 90 % of ethnic minority-led businesses said

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