THE Financial Conduct Authority (FCA) has called on banks, building societies, and payment firms to enhance support for individuals seeking to open a bank account, particularly those in vulnerable circumstances.
In a new report, the FCA acknowledged current efforts by financial institutions to help customers access accounts but emphasised the need for more consistent practices. The FCA is urging providers to increase awareness of basic bank accounts, which offer essential payment services without overdraft facilities, and to simplify the application process.
The regulator also advised account providers to review their policies on account denials and closures, ensuring that vulnerable consumers are not unfairly excluded. It emphasised that customers should not be denied access solely because they lack standard forms of identification and called for greater clarity on alternative acceptable IDs.
The FCA reminded providers to comply with their obligations under the Consumer Duty when closing or denying accounts, ensuring clear and supportive communication with customers.
Additionally, the FCA released independent research highlighting the challenges faced by some of the most financially excluded individuals in accessing financial services. This research aims to help the industry and consumer groups better support these individuals.
Sheldon Mills, executive director of consumers and competition at the FCA, said, "We’ve seen examples of really good practice... but also areas where there is room for improvement. By sharing both, we want to achieve more consistent outcomes."
The report also addressed concerns from various organisations, including pawnbrokers and charities, about difficulties in accessing accounts. While the FCA expects firms to have clear definitions of reputational risk, it has a limited role in advocating for business and charity customers.
In its 2023 findings, the FCA reported no evidence of accounts being closed due to lawfully expressed political opinions, a conclusion reaffirmed in the latest report. The FCA has asked senior leaders in firms to personally attest to their compliance with regulations.
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