FCA finds a third of basic bank accounts rated as poor or very poor

The FCA has secured commitments from the country’s biggest banks to improve access to basic UK bank accounts after finding widespread shortcomings in how vulnerable customers are treated.

The Financial Conduct Authority (FCA) said almost one in three interactions with customers seeking a basic bank account were rated as either “poor” or “very poor” during a nationwide mystery shopping exercise involving 298 visits and calls.

Basic bank accounts are designed to provide essential banking services for people who may not qualify for a standard current account. They allow customers to receive wages and benefits, pay bills and make everyday payments without access to an overdraft or associated fees.

The FCA found that while around 4.3 million UK adults now have a basic bank account and the number of unbanked adults has fallen to 900,000, many consumers still face unnecessary barriers when trying to open one.

Among the regulator’s most concerning findings were:

• 34% of customer experiences were rated poor or very poor.
• In 36% of cases, staff failed to mention a basic bank account unless prompted by the customer.
• Around 15% of staff failed to mention the accounts at all, even after customers specifically asked questions that should have triggered the discussion.
• Nearly 70% of customers with non-standard identification or no fixed address were left unclear about what alternative documents they could provide.
• Almost 70% of interactions failed to adequately recognise or respond to signs of vulnerability.

The FCA warned these shortcomings risk leaving some of the UK’s most vulnerable consumers without access to essential banking services, particularly during ongoing cost-of-living pressures.

Following the basic banking review, the nine largest banks required to offer basic bank accounts under the Payment Accounts Regulations have agreed a package of improvements through industry body UK Finance.

The commitments include identifying customers who may be eligible earlier in the application process, providing clearer guidance on acceptable identification for people without passports, driving licences or fixed addresses, and ensuring vulnerable customers are offered suitable alternatives to online-only application journeys.

The FCA will monitor banks’ progress through individual remedial plans and an industry-wide review led by UK Finance after six and twelve months. It warned that if firms fail to deliver meaningful improvements, it will consider taking further regulatory action.