Nine major UK banks and building societies have agreed to implement key changes to their basic bank account offerings following a Financial Conduct Authority (FCA) investigation that revealed widespread failures in assisting vulnerable customers. The FCA's mystery shopping exercise found that these institutions were not consistently offering basic bank accounts to those who could benefit, often failing to mention them at all and instead pushing vulnerable individuals towards unsuitable online applications.
Banks Committed to Improvement Plans
The nine institutions 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). All nine have agreed to individual improvement plans and, in collaboration with UK Finance, have made a collective commitment to:
- 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.
FCA Director Calls for Better Engagement
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. 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.”
Industry Commitment to Raising Standards
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 Cycle 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: Key Features
Basic bank accounts offer many of the same functions as a regular current account but are designed for individuals who might otherwise be excluded from the banking system. More than four million people in the UK hold these accounts. Features include:
- Accepting payments such as wages and benefits, and allowing account-holders to make payments through debit cards, direct debits and standing orders.
- Free to use, with no overdraft facility.
- Available to those with a bad credit history, who are bankrupt or have an official debt recovery plan.
- Some access for homeless people, by working with charities to confirm identity.
The FCA will continue to monitor the banks' progress to ensure the commitments translate into tangible improvements for vulnerable customers.
