Basic bank accounts: the FCA turns inclusion into a conduct test

The FCA has put the nine banks legally required to offer basic bank accounts on a public improvement footing, after a mystery shopping exercise found a third of interactions rated poor or very poor (FCA). Barclays UK, The Co-operative Bank, HSBC UK, Lloyds Banking Group, Nationwide, NatWest, Santander UK, TSB and Virgin Money UK have each agreed individual plans, alongside a collective commitment brokered through UK Finance (FCA). This is not a thematic review parked in a policy statement. It is a named-firm intervention with follow-through.

The substance of the finding is uncomfortable for retail bank boards. The FCA's exercise covered 298 interactions across branches and telephone, testing two scenarios: a customer in financial hardship with non-standard ID, and someone post-bankruptcy with standard ID (FCA). Frontline staff often failed to mention basic bank accounts at all, and pushed vulnerable customers toward online journeys ill-suited to their circumstances (FCA). That is a Consumer Duty problem dressed as an access problem. The regulator is signalling that outcomes for customers in vulnerable circumstances will be tested through observed behaviour, not policy documents or product governance decks.

Emad Aladhal, director of retail banking at the FCA, framed the message plainly: 'the biggest banks have now committed to improving how they are offered, and we'll be holding them to account to make sure change happens' (FCA). The subtext for boards is that the FCA now has a baseline it can re-shop against. Any second-round mystery exercise that shows limited movement will read as a governance failure, not a training gap. Peter Tyler of UK Finance pointed to the expanded Breaking the Cycle initiative as the industry vehicle for customers without a fixed address (FCA), which gives firms a collective shield but also a collective standard against which laggards will be visible.

The stakeholder implications run wider than retail banking. Charities, local authorities and debt advice bodies now have a named list of firms with public commitments, and a regulator inviting escalation. Internally, the intervention cuts across three functions that rarely align cleanly: branch and telephony operations, financial crime and onboarding, and vulnerability policy. The FCA is asking firms to spot vulnerability early and offer accessible alternatives to online-only journeys (FCA), which means ID and address verification controls have to bend without breaking. That is a design question for the COO and MLRO jointly, not a script change for the contact centre. Boards that treat this as a communications exercise will find themselves managing a supervisory case within a year.

The wider read-across is that the FCA is comfortable using named-firm accountability as a supervisory tool in areas where 97% market coverage might once have suggested the job was done (FCA). Inclusion, like closed-book pensions and wholesale conduct, is being pulled into the outcomes framework. Senior leaders should assume that mystery shopping, once a niche tool, is now part of the standard supervisory kit, and that public commitments made through trade bodies will be treated as enforceable expectations.