News
Banks can do more to help every Brit get a current account, says FCA
Banks could help to improve financial inclusion by doing more to promote basic current accounts, the City regulator has said.
A review by the Financial Conduct Authority (FCA) into how banks provide information about basic accounts found staff often lacked knowledge or failed to suggest them to eligible customers.
A basic bank account is a no-frills account designed for people who do not qualify for other types of account because they have a poor credit history.
They are typically free, do not have an overdraft facility and do not require customers to pass a credit check to be eligible.
Over one million people in the UK do not have a bank account and over 60% are unaware of basic bank accounts, according to a 2017 FCA study.
Having a bank account can make it easier to claim benefits, receive wages and pay rent.
Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind
Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with
Sponsored by Post Office
FCA investigation
The FCA carried out a mystery shopping exercise at five of the nine banks that provide basic bank accounts.
It would not name the banks it reviewed but basic accounts are available at: Barclays, Clydesdale and Yorkshire Bank, Co-operative Bank, HSBC, Lloyds Banking Group, Nationwide, Royal Bank of Scotland, Santander and TSB.
The mystery shoppers explained their personal circumstances to staff and asked about opening an account. The backstories meant it should have been apparent to staff that they were eligible for a basic account.
However, the FCA found staff often did not identify potential eligibility or give any information on basic bank accounts, only disclosed the availability of basic accounts later on in the account opening process, and asked customers for additional proof of ID, such as a passport, which wasn’t necessary.
The FCA said: “We encourage all firms to create a customer journey which is inclusive of all customers and their needs.”
It has asked banks to consider how best to support consumers who are inadvertently excluded from participating in financial services, and to help prevent that exclusion from continuing.