Breaking Barriers: Understanding Financial Exclusion in Diverse Ethnic Communities
Our report, Systemic Barriers to Financial Inclusion Project: Rapid Literature Review. Written by ClearView Research, commissioned by Rooted Finance and Money A+E, the report examines existing literature on the systemic, structural, and cultural barriers that continue to block equitable access to financial products and services for diverse ethnic communities (DECs) across the UK.
Across the country, Black and ethnic minority communities continue to face a financial system that was not designed with them in mind. Our review highlights the “ethnicity premium” - a structural penalty that forces people to pay more for essentials like credit, insurance, and mortgages. Even when financial histories are identical, people from diverse ethnic communities often face higher costs, stricter assessments, and more aggressive debt collection practices.
These systemic barriers create a cycle where wealth, opportunity, and trust are harder to build and maintain. Understanding these challenges is crucial, because it’s not enough to teach people how to manage money; the financial system itself needs to be fair, inclusive, and culturally responsive. By exploring these issues, we can uncover the root causes of exclusion and identify solutions that empower communities rather than leaving them behind.
A Collaborative Effort
The report benefited from a formal House of Commons launch event, where early insights were shared with industry stakeholders, community members, and researchers, highlighting cultural nuances, systemic blind spots, and the lived realities of the ethnicity premium.
In partnership with Money A+E and Rooted Finance, we ensured the analysis was grounded, credible, and aligned with community experiences. It created a space where people could shape the narrative rather than be spoken for, reinforcing trust and producing findings with greater impact, depth, and relevance. Ultimately, this collective approach transformed the research into a shared endeavour, reflecting the data, resilience, and clarity that only emerge when communities, researchers, organisations, and institutions collaborate.
Key Findings
Our research uncovered several critical insights that illustrate the challenges faced by ethnic minority communities in accessing fair and equitable financial services.
1. The ethnicity premium: a structural disadvantage
Ethnic minority communities often face higher costs when accessing credit, insurance, or mortgages. Discriminatory practices, such as higher interest rates and increased debt collection, worsen financial vulnerability. Tools like postcode profiling further restrict fair access, creating systemic disadvantage.2. Systemic, cultural, and structural barriers
Discriminatory lending practices and financial gatekeeping reinforce barriers to wealth accumulation for minority and migrant communities. Many financial education initiatives fail to address the specific needs and experiences of these groups. This deepens exclusion and prevents equitable access to financial opportunities.3. Algorithmic bias and digital financial exclusion
AI-driven lending models frequently reject minority applicants, even when their financial profiles are comparable to others. Opaque credit-scoring algorithms perpetuate discrimination in lending and insurance products. The lack of transparency and accountability in these systems reinforces long-standing inequalities.4. Leadership representation and financial policy failures
Senior leadership in financial institutions remains largely homogenous, limiting diverse perspectives in decision-making. Superficial diversity initiatives have failed to dismantle structural barriers to inclusion. Weak enforcement by regulatory bodies allows discrimination to persist across products and services.5. Alternative financial models and future directions
Community-based lending and savings schemes, such as rotating saving groups, demonstrate more equitable ways of supporting financial access. Incorporating alternative financial histories, like rent and community savings participation, alongside stronger anti-discrimination policies, could create lasting inclusion.
Looking Ahead
With this report, we aim to shine a light on the often-overlooked issue of financial exclusion and emphasise the urgent need for meaningful action.
As Dr Nathania Atkinson, our Senior Project Consultant, emphasises:
“This report highlights financial exclusion is not something that is merely overlooked in the system, but a fundamental flaw deeply rooted in the historical foundations and infrastructure of the system.
It explores the impact of the ethnicity premium and exposes, with brutal clarity, the harsh reality that whole communities are charged more based on factors including, but not limited to, who they are and where they live rather than their financial behaviour.
We have become too familiar with communities carrying this burden, all while championing them as resilient. But at what cost?
This report is a contribution to real change for those who navigate the consequences of this systemic injustice at the centre of financial decision-making”.
We extend our heartfelt thanks and gratitude to Rooted Finance and Money A+E for their invaluable support and collaboration in this project.
Muna Yassin MBE, CEO of Rooted Finance, commented, "The 'ethnicity premium' is not just a statistical anomaly; it's a lived reality for countless individuals from a minority ethnic background. It’s a systemic injustice that blocks economic mobility and perpetuates inequality.
We are determined to dismantle these barriers and rewire the financial system so that it truly serves everyone. It's been an absolute pleasure to work with ClearView, who really get the importance of this work. The team have delivered an outstanding, rigorous report, with five practicable recommendations that will form the basis of our project over the next 3 years"
Jerry During MBE & FRSA, CEO and Co-founder of Money A+E, commented, "Working with CVR has been refreshing, educational, insightful and the right choice for this vital piece of work creating Equity In Finance. They bring lived experience and culturally relevant approaches that are often left out of research, policy design and implementation.
Too often, this leads to failing and ineffective systems and policies, leaving diverse ethnic and disadvantaged communities behind!!!
These report recommendations represent key aspects of urgent solutions needed now, for all sections of society, to dismantle the systemic barriers and discrimination causing the ’Ethnicity Premium’ in financial inclusion and economic participation."
Financial exclusion isn’t just a personal issue - it is a system failure.
To create real change, regulators, financial institutions, and communities must work together to make finance transparent, accountable, and culturally responsive. This means holding institutions accountable for discriminatory practices, embedding alternative financial histories into credit assessments, and investing in culturally tailored financial education.
We extend our heartfelt gratitude to Rooted Finance and Money A+E for their invaluable support and collaboration on this project.
Read the full report: Systemic Barriers to Financial Inclusion Project: Rapid Literature Review to explore how these findings can reshape financial services for ethnic minority communities.
For further information or media inquiries, please contact:
Dr Nathania Atkinson, Senior Project Consultant, nathania@clearviewresearch.co.uk