From Tuesday, 13 major UK banks have committed to improving access to basic bank accounts following a Financial Conduct Authority (FCA) investigation that found around a third of customer experiences were rated as poor or very poor.
What the Rule Change Entails
Basic bank accounts are simplified accounts designed for individuals who may not qualify for standard current accounts due to poor credit history or lack of identification. They provide essential banking services without an overdraft facility. The FCA's mystery shopping exercise revealed that 28% of interactions were rated good or very good, 38% fair, 20% poor, and 14% very poor.
Commitments from Banks
The affected banks—Barclays, Co-op, HSBC, Lloyds, Halifax, Bank of Scotland, Nationwide, NatWest, RBS, Ulster Bank, TSB, Virgin Money, and Santander—have agreed to individual improvement plans. Key commitments include providing the right account for customers first time with clear communication, making it straightforward for customers without standard identity or a fixed address to open an account, and spotting vulnerability early while offering accessible alternatives to online-only options.
Industry Reactions
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.”
Peter Tyler, director of personal banking at UK Finance, added: “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.”
