New FCA Rules Improve Access to Basic Bank Accounts at 13 Major UK Banks

From Tuesday, 13 of the UK’s largest banks will implement new rules designed to make accessing basic bank accounts simpler and more efficient. The Financial Conduct Authority (FCA) has confirmed this change as part of a broader initiative to address previously poor customer experiences and enhance financial inclusion.

Basic bank accounts provide essential banking services without overdraft options, catering primarily to individuals who may be unable to open standard current accounts due to poor credit or other barriers. These accounts are crucial for allowing vulnerable customers to manage their finances.

This rule change follows an FCA mystery shopping study that revealed nearly a third of customer experiences with basic bank accounts were rated poor or very poor. The findings showed only 28% of interactions were considered good or very good, with the rest ranging from fair to very poor.

In response, banks and building societies have agreed to implement individual improvement plans. These measures focus on offering the right account at the first attempt, clear communication, and reducing obstacles during the application process. Crucially, the new rules require banks to accommodate customers without standard identification or a fixed address and to detect vulnerability early by providing accessible alternatives to online-only banking options.

Emad Aladhal, director of retail banking at the FCA, emphasized the importance of these changes: “While over 97% of UK adults have a current account, our research shows there is still significant room for improvement in how banks engage with all customers. Ensuring those who would benefit most from basic bank accounts can access them is vital for financial inclusion. The largest banks have committed to improvements, and we will hold them accountable.”

Peter Tyler, director of personal banking at UK Finance, also highlighted the importance of consistent service quality: “Basic bank accounts are a critical step toward financial independence. Although most customers have positive experiences, more work is needed to ensure this is universal. Through initiatives like ‘breaking the cycle,’ we are committed to raising standards and helping those facing barriers, including individuals without fixed addresses.”

The FCA’s updated rules affect Barclays, Co-op, HSBC, Lloyds, Halifax, Bank of Scotland, Nationwide, NatWest, RBS, Ulster Bank, TSB, Virgin Money, and Santander, aiming to foster more inclusive banking practices throughout the UK.