UK Defence Startups Are Being Denied Banking Services Under ESG Rules

Successive UK governments have encouraged defense startups to invest in the fast-growing and rapidly changing sector, but regulation lags behind politics, causing compliance issues for many companies. Eyebrook Technologies, a British startup focused on surveillance and counter-drone systems, faced difficulties securing a bank account due to ESG rules and anti-money laundering safeguards.

The company's co-founder, Will Morris, found that several UK banks, including Barclays, refused to provide accounts for defense-linked businesses. Despite securing £700,000 in funding, Morris eventually found a bank willing to work with him after reaching out to the bank's UK CEO. Industry experts and defense startups have expressed concerns about the lack of venture capital and regulatory issues in the UK, leading some companies to consider moving their operations abroad.