Nine banks have agreed to make key changes to accounts after the Financial Conduct Authority carried out a test – and discovered they weren’t helping some of the neediest customers. The FCA carried out a mystery shop revealed that the bank account providers were not consistently offering these accounts to customers who could benefit from them.
The firms often failed to mention basic bank accounts at all and pushed customers in vulnerable circumstances towards online applications unsuitable for their need, the FCA said. The nine banking institutions that are legally required to offer Basic Bank Accounts are Barclays UK, The Co-operative Bank, HSBC UK, Lloyds Banking Group (including Halifax and Bank of Scotland brands), Nationwide Building Society, NatWest Group (including RBS and Ulster Bank brands), Santander UK, TSB and Virgin Money UK (now a brand of Nationwide Building Society).
- Provide the right account for customers, first time, with clear communication and minimal friction.
- Make it straightforward for customers without standard ID or a fixed address to open an account.
- Spot vulnerability early and offer accessible alternatives to online-only journeys.
Emad Aladhal, director of retail banking at the FCA, said: “Progress has been made with over 97% of UK adults having a current account, but our latest work shows that all too often banking firms’ engagement with customers still needs improvement. Bank accounts are important for financial inclusion, and this is about making sure the very people who could benefit from basic bank accounts are not missing out. someone’s identity
“That’s why the biggest banks have now committed to improving how they are offered – and we’ll be holding them to account to make sure change happens.”
Peter Tyler, director of personal banking at UK Finance, said: “A basic bank account can be an important first step towards financial independence, and while most customers who hold one have positive experiences, we recognise that more can be done to ensure consistently good outcomes for everyone. That is why UK Finance and our members are committed to raising industry standards and expanding access.
“The recently expanded Breaking the CycleLink is external initiative is a key part of this work, providing practical support to those facing barriers to accessing essential banking services, such as individuals without a fixed address.”
Basic bank accounts have many of the same functions as a regular current account, but are designed for those who might otherwise be excluded from the banking system. More than four million people in the UK have these accounts.