The Financial Conduct Authority (FCA) has acknowledged the efforts of banks, building societies, and payment firms in assisting customers to access accounts. To build on these efforts, the FCA encourages financial institutions to draw from successful practices, such as collaborating with homeless charities to tailor support for vulnerable customers. In particular, the FCA emphasizes the need for increased awareness of basic bank accounts. These accounts, which allow for payments without an overdraft facility, are vital for those struggling with financial stability. The FCA found that many providers could simplify the application process for these accounts, thereby enhancing accessibility.

Reviewing Account Denials and Closures

The FCA has urged account providers to reassess their policies regarding account denials and closures. The regulator stresses that these processes should not disproportionately affect vulnerable consumers. Furthermore, providers must avoid denying access based solely on the inability to present standard forms of identification. Instead, they should clarify which alternative forms of ID are acceptable, ensuring a more inclusive approach.

Upholding the Consumer Duty

When accounts are closed or denied, the FCA has reminded providers of their obligations under the Consumer Duty. This includes clear and helpful communication with customers about their options and reasons for the decision. The FCA aims to prevent unnecessary confusion and ensure consumers stay well-informed about their rights and alternatives by emphasizing transparency.

Research on Financial Exclusion

In addition, the FCA has published independent, qualitative research shedding light on the experiences of financially excluded consumers. This research aims to help both industry and consumer groups better understand how tailored support can facilitate access to financial services. The findings highlight the importance of addressing barriers faced by marginalized groups, thereby promoting a more inclusive financial ecosystem.

Addressing Reputational Risk and Compliance

The FCA’s report also touches on challenges faced by various organizations, including pawnbrokers, charities, and those in the adult entertainment sector, when accessing accounts. The regulator expects firms to have a well-considered definition of reputational risk. Although the FCA has a limited scope in acting on behalf of business and charity customers, it maintains oversight in ensuring fair practices.

Ensuring Compliance with Political Neutrality

In 2023, the FCA found no evidence suggesting that accounts were closed due to lawfully expressed political opinions. The latest report reaffirms this finding. However, to reinforce accountability, the FCA has requested senior leaders in financial firms to sign an attestation confirming their commitment to compliance and their assurance of adherence to regulations going forward.