The Financial Conduct Authority (FCA) has said banks could do more to support those who want an account, after finding that several providers could make it easier to apply for one.
A new FCA report has urged banks to increase awareness of basic accounts that allow people to make and receive payments but do not offer an overdraft.
It has also demanded account providers review their approach to account denials and closures, in a bid to ensure that vulnerable consumers are not hamstrung.
Earlier this year, following a wave of complaints, the previous UK government proposed a draft law that would force banks to give customers more advanced notice and an explanation before closing their accounts.
‘Room for improvement’ – FCA
Commenting on the report, Sheldon Mills, executive director of consumers and competition at the FCA, said the regulator has seen examples of “really good practice” but has also spotted “areas where there is room for improvement”.
“By sharing both, we want to achieve more consistent outcomes,” he added, “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.”
It follows a similar report from this time last year, which found no suggestions that account providers had closed customers’ accounts due to their political beliefs or other views.
Today’s report included no further evidence of this but has asked senior leaders in firms to sign an attestation as evidence they have complied with rules.
The issue of account closures was thrust into the spotlight in 2023 after Reform UK leader Nigel Farage claimed Natwest-owned Coutts tried to “debank” him partly because of his political views.
The resulting scandal triggered the resignations of both Natwest and Coutts’ chief executives.
In May, a group of MPs urged the City watchdog to force banks to be more transparent on why they “debank” businesses, amid criticism that lenders are fettering growth and innovation among small firms.