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The Financial Conduct Authority (FCA) has issued a call to banks, building societies, and payment firms operating in the UK to do more to provide access to bank accounts, particularly for those who currently lack one.
In a new report, the UK’s banking watchdog highlights the importance of improving awareness and accessibility of basic bank accounts, which allow customers to make and receive payments without offering an overdraft facility.
The report acknowledges ongoing efforts by account providers to support financially excluded customers, but emphasises that more needs to be done.
The FCA found that some providers could simplify the application process and better communicate the availability of basic accounts.
One of the regulator’s key concerns is the potential exclusion of vulnerable consumers, including those unable to provide standard forms of identification.
It has urged banks to clarify which alternative forms of ID are acceptable and to ensure that no one is denied access without a valid reason.
The FCA has also reminded firms of their obligations under the Consumer Duty, stressing the importance of clear and helpful communication, especially in cases where accounts are denied or closed.
The report also outlines the challenges institutions such as charities and organisations in the adult entertainment sector face in accessing accounts due to perceived reputational risks.
It has called on firms to adopt a clear and well-considered definition of reputational risk, while pointing out that it has a limited remit concerning business and charity customers.
Establishing best practice
Sheldon Mills, executive director of consumers and competition at the FCA, emphasised the need for consistency across the industry.
“We’ve seen examples of really good practice — with account providers helping people access a product vital for financial inclusion — but also areas where there is room for improvement,” he said.
“By sharing both, we want to achieve more consistent outcomes, with people being aware of what accounts there are that might be right for them, more support for the vulnerable and people not being denied access without good reason.”
The new report follows a 2023 FCA review of account access and closures, conducted in response to concerns that accounts were being closed due to customers’ political beliefs or lawfully expressed views.
The FCA has confirmed that it has not found evidence to support these concerns, but continues to monitor the situation closely.
Looking ahead, the regulator said it expects account providers to review their current practices and make necessary improvements to ensure broader access to banking services.
The regulator has also invited firms to engage in discussions on how they can implement changes in response to the report's findings, with the aim of achieving more consistent and equitable outcomes for all consumers.
