The UK's largest banks have agreed to improve access to basic bank accounts after the Financial Conduct Authority found that many vulnerable customers were not receiving adequate support when attempting to open accounts. The FCA identified that some banks failed to offer suitable accounts to eligible customers, creating barriers for people facing financial hardship or homelessness. Basic bank accounts serve over four million UK customers and provide essential banking services to individuals who may not qualify for standard current accounts, including those with poor credit histories or no fixed address.
Basic bank accounts are designed to provide essential banking services free of charge without overdraft facilities. They allow customers to receive wages, pensions and benefits, make payments using a debit card, and set up direct debits and standing orders. These accounts are available to people with poor credit histories, those who are bankrupt, or individuals on official debt recovery plans. Some banks also work with charities to help homeless individuals verify their identity and access these accounts. Nine major banks and building societies currently offer basic accounts: Barclays, The Co-operative Bank, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander, TSB, and Virgin Money.
FCA Mystery Shopping Reveals Poor Customer Support
The FCA's findings were based on a mystery shopping exercise involving 298 interactions with banks through branches and telephone services. Only 28% of customer experiences were rated as good or very good, while 38% were considered fair. However, 20% of interactions were rated as poor and a further 14% as very poor. Among the most common issues were banks failing to recommend basic bank accounts to customers who clearly qualified for them, particularly people without a permanent address. In several cases, customers were directed toward online applications for standard accounts that were not appropriate for their circumstances, despite needing more support or alternative application methods.
Banks Commit to Accessibility Improvements for Vulnerable Customers
After the FCA's intervention, the participating banks committed to making the application process more accessible and ensuring eligible customers are offered the correct account from the outset. They agreed to make it easier for people without standard forms of identification or a fixed address to open an account. Banks also committed to providing alternatives to online-only applications for customers who may be vulnerable or digitally excluded.
FAQ
What did the FCA find about UK banks' basic account services?
The FCA found that many vulnerable customers were not receiving adequate support when trying to open basic bank accounts. A mystery shopping exercise involving 298 interactions showed only 28% of experiences were rated good or very good, while 34% were rated poor or very poor. Banks frequently failed to recommend basic accounts to eligible customers, particularly those without a permanent address.
What changes did UK banks agree to make for basic account access?
After the FCA's intervention, participating banks committed to making the application process more accessible and ensuring eligible customers are offered the correct account from the outset. They agreed to make it easier for people without standard identification or a fixed address to open accounts and to provide alternatives to online-only applications for vulnerable or digitally excluded customers.
