FCA tells banks to improve access to basic bank accounts

Nine of the biggest UK banks and building societies are legally mandated under the Payment Accounts Regulations 2015 to offer basic bank accounts. They support financial inclusion and exist to serve people who may not otherwise be able to access standard current accounts - providing access to essential services with no fees and no overdraft.  However more needs to be done to ensure that those customers who could benefit from such accounts are consistently being offered them. That’s the core finding published today in the results from a mystery shopping exercise conducted by the FCA in recent months. 

Progress has been made, and the mystery shopping exercise finds that firms can deliver good outcomes – but there is inconsistency across the sector, and poor practices are still widespread.  Three themes stand out in the FCA’s report:

• Firms didn’t consistently mention and discuss BBAs early enough in the conversation (unless prompted by the consumer, and sometimes not even with a prompt).
• For consumers who did not have standard identification or a fixed address, staff often did not clearly explain what alternative evidence of identification consumers could use or what next steps they needed to take (thereby creating avoidable barriers for consumers).
• Staff often did not recognise and respond to characteristics of vulnerability, or adapt their approach for consumers who needed help to complete a standard or digital journey.

Fostering change

To address this, the banks and building societies have agreed to individual improvement plans aimed at delivering measurable improvements in consumer outcomes at both firm and sector level.  At a firm level, these plans include firms ensuring that they have clear accountability, monitor outcomes properly and report transparently on their progress.  In terms of sector wide change, the FCA is working with UK Finance to encourage fast progress, with firms committing through the trade body to proactively address each of the three priority areas identified above.  We can see the advantages of working through UK Finance – hopefully enabling firms to monitor progress, share learning and identify further opportunities for improvement. The FCA say UK Finance will also lead a sector wide review process – with review to see if milestones are being met at the 6 month and 12 month stages – following each a summary of progress, alongside emerging themes and areas of ongoing focus will be published, enabling firms to recalibrate as needed as the process progresses.  This sets the stage for swift improvement, with firms having clear goals and commitments to improve customer experiences. The FCA too will continue to review and monitor each firm’s remedial plans, and follow up with them, taking action as needed if sufficient and sustained improvement in consumer outcomes is not observable. 

The FCA press release can be found here
The FCA’s report on good and poor practices following its mystery shopper exercise can be found here