Since 2015 around 60% of physical banks and building societies on the high street have closed¹, as the drive to online banking takes precedence, though many still prefer visiting their local branch.

In a new report, the Financial Conduct Authority (FCA) encourages banks and building societies to support customers accessing their accounts.  They are also encouraged to expand their good practices by working with homeless charities to tailor services catering to customers in vulnerable circumstances and do more to support those who want a bank account but don’t have one.

At the same time, they are being urged to increase awareness of basic bank accounts, allowing people to make and receive payments without an overdraft facility. In its findings, the FCA found that several providers could make it easier for consumers to apply for this type of account.

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As a result, the FCA is asking financial institutions to review their overall approach regarding their procedures for account denials and closures. This ensures vulnerable consumers are not losing out, especially those who cannot produce the standard forms of ID. Financial institutions must therefore make it clear from the outset which alternative forms of ID are acceptable.

When an account is closed or denied states the FCA report,  all financial institutions should act according to their obligations under the Consumer Duty, including communicating in a clear manner that is helpful for customers.

In the report, the FCA has also published independent, qualitative research on the experiences of some of the most financially excluded consumers when accessing and using financial products and services. This will help industry and consumer groups understand how the right support can help these consumers effectively access services.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA said: “We’ve seen examples of really good practice – with account providers helping people access a product vital for financial inclusion – but also areas where there is room for improvement. By sharing both, we want to achieve more consistent outcomes, with people being aware of what accounts there are that might be right for them, more support for the vulnerable and people not being denied access without good reason.”