Background
The FCA highlights that BBAs provide essential everyday banking features without overdrafts or fees. Under the Payment Accounts Regulations 2015 (the PARs), the nine largest standard personal current account providers in the UK must offer BBAs to legally resident consumers who either do not have a UK bank account or are not eligible for all other payment accounts.
Summary
The FCA sets out the following key findings in relation to BBAs:
- Firms did not consistently identify and discuss BBAs early enough: Eligible consumers often had to prompt frontline staff before BBAs were mentioned. Even when prompted by the consumer, frontline staff still did not mention BBAs to eligible consumers. In the better examples of practices observed by the FCA, it noted that staff identified early that a BBA might meet the consumer’s needs and explained the account as a realistic option for them, but this was not standard practice. Firms often directed consumers to a standard personal current account first, only introducing the BBA after additional checks, or likely rejection from the standard personal current account route.
- Firms created avoidable barriers for consumers with non-standard identification or no fixed address: Firms are required to comply with anti-money laundering (AML) and financial crime rules, including taking steps to identify and verify their customers. However, the FCA sets out that it has been clear that they must take a proportionate approach. In many instances the FCA found that staff were rigid and inconsistent, particularly where consumers did not have standard documents or a fixed address. In these cases, staff often struggled to explain acceptable alternatives or next steps.
- Staff did not consistently recognise and respond to characteristics of vulnerability or adapt support: The FCA found that this was particularly evident where the consumer could not reasonably complete an online journey without support. In some interactions, staff directed people to the website or online application as the primary application route without adapting the journey for them.
Next steps
The FCA highlights that all nine designated firms must deliver measurable improvements in consumer outcomes urgently, at both firm and sector level. To support this, they must have clear accountability, monitor outcomes properly and report transparently on their progress.
Given their view of the importance of access to banking services, the FCA have also called for tangible improvement in outcomes at a sector-wide level, again supported by clear ownership, robust monitoring and transparent reporting.