The UK’s biggest banks have been told to do better on basic bank accounts. Not later. Not vaguely. Now.
The Financial Conduct Authority has pushed several major banks and building societies to improve how they offer basic accounts, after its review found that too many people who need these accounts are still facing friction, confusion, or poor service.
That is a big problem because basic bank accounts are meant to be the safety net. They are designed for people who may struggle to open a standard current account, including those with limited identification, no fixed address, or signs of financial vulnerability.
FCA Finds Poor Service in Basic Bank Account Access
The FCA’s mystery shopping exercise looked at 298 interactions across bank branches and telephone channels. The results were not exactly comforting.
According to the regulator, around a third of customer experiences with basic bank accounts were rated poor or very poor. More specifically, 20% were rated poor and 14% were rated very poor. Only 28% were rated good or very good, while 38% landed somewhere in the middle as fair.
That tells its own story. A product built for financial inclusion is still too hard to access for some of the people it is supposed to help most.
Nine UK Banking Firms Agree to Improvement Plans
The nine institutions legally required to offer Basic Bank Accounts have now agreed to individual improvement plans. The list includes Barclays UK, The Co-operative Bank, HSBC UK, Lloyds Banking Group, Nationwide Building Society, NatWest Group, Santander UK, TSB, and Virgin Money UK.
These are not small players. These are the names people expect to turn to when they need basic banking support.
The FCA said it has also worked with UK Finance to secure a wider commitment from the firms. The goal is simple enough: customers should be offered the right account the first time, with clearer communication and less friction.
Easy to say. Harder to deliver consistently across branch teams, call centres, online journeys, ID checks, and vulnerable customer processes.
Why Basic Bank Accounts Matter
Basic bank accounts are not fancy fintech products. They are not about premium features, cashback, or slick app design.
They are about access.
A person without a usable bank account can struggle to receive wages, pay bills, manage benefits, rent a home, or simply participate in normal financial life. That is why the FCA is framing this as a financial inclusion issue, not just a customer service issue.
The regulator said progress has already been made, with more than 97% of UK adults now holding a current account. Still, that remaining gap matters. And even for people who technically can open an account, the actual process may still feel blocked if staff do not explain the right options properly.
Banks Must Support Customers Without Standard ID
One of the more important parts of the commitment is around customers who do not have standard identification or a fixed address.
Banks have agreed to make account opening more straightforward for these groups. They have also pledged to identify vulnerability earlier and offer accessible alternatives when an online-only process does not work.
That part matters because digital banking can quietly exclude people. Online forms, document uploads, automated checks, and rigid identity flows are efficient for many customers. For others, they become a wall.
The FCA is basically telling banks: do not let the system decide too quickly that someone is too difficult to serve.
FCA Says Banks Will Be Held to Account
Emad Aladhal, the FCA’s director of retail banking, said bank accounts are important for financial inclusion and that people who could benefit from basic accounts should not miss out. He added that the biggest banks have now committed to improving how these accounts are offered, and the regulator will hold them to account.
That last part is the key. Commitments are one thing. Better frontline behaviour is another.
For UK banks, this is not only about compliance. It is about whether vulnerable customers can walk into a branch, call a bank, or begin an account opening journey without being pushed away by poor explanations, rigid processes, or staff who do not properly recognize what a basic bank account is for.
The FCA has put the issue back on the table. Now the banks have to show the process actually changes.