The FCA has recognised that banks, building societies and payment firms are trying to support customers to access accounts and is encouraging them to build on examples of existing good practice, such as working with homeless charities to tailor their support to the needs of customers in vulnerable circumstances.
Banks and other account providers have been urged to increase awareness of basic bank accounts, which allow people to make and receive payments but without the availability of an overdraft. The FCA found that several providers could make it easier to apply for one.
The FCA has asked account providers to review their overall approach to account denials and closures – and particularly to ensure that vulnerable consumers aren’t losing out. Providers should also ensure people aren’t denied access just because they can’t produce standard forms of ID, and make it clear which alternative forms of ID are acceptable.
Where accounts are closed or denied, the regulator has reminded providers that they should act in line with their obligations under the Consumer Duty, including communicating in a way that is clear and helpful for customers.
The FCA has also published independent, qualitative research on the experiences of some of the most financially excluded consumers when accessing and using financial products and services. This will help industry and consumer groups understand how the right support can help these consumers effectively access services.
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:
‘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. 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 FCA’s report also highlighted issues other organisations have experienced accessing accounts – including pawnbrokers, charities and in the adult entertainment sector. It has set out an expectation that firms should have a clear, properly considered definition of reputational risk. However, it has a limited remit to act for business and charity customers.
In 2023, the FCA said that it had not found evidence of accounts being closed due to lawfully expressed political opinions. The new report confirms it has not found any further evidence to suggest that this is happening. However, it has asked senior leaders in firms to sign an attestation taking personal responsibility for ensuring rules have been complied with and that they are confident of their compliance going forward.
