A patchwork of improvements and adjustments have been targeted at some groups of consumers, but the basic level of access to financial services is still not universal, the Treasury Committee has found.
In its Consumer Access to Financial Services report, ministers in the committee said firms should be required to always act in customers’ best interests, and that a legal duty of care may be necessary.
The committee found that the Equality and Human Rights Commission (EHRC) needs better resources to enforce the Equality Act 2010, which requires service providers to make reasonable adjustments for individuals covered by the act.
Reasonable adjustments that financial services firms should make include providing interpreters, tactile bank cards and Braille or Moon tactile font communications.
One customer, Eleanor Southwood from the Royal National Institute of Blind People told the committee about the importance of such adjustments: “The other day I got into a taxi and had to pay on my card. It was a touchscreen. I just had to give the driver my PIN. That is a deeply unsatisfactory arrangement. Why on earth should somebody who cannot see be putting themselves at that level of risk of financial crime, just because it is not accessible? That is a huge area of concern.”
Enforcement of banks’ compliance with Equality Act should be transferred to Financial Conduct Authority (FCA), the ministers said.
“The FCA should make it clear to financial services providers that such adjustments are expected of them under its principle of treating customers fairly,” the committee said. “The EHRC has decided that enforcing access to financial services is not one of its strategic priorities, and that it is unable to take on individual cases due to a lack of resources.”
Alongside these changes, the committee called for the FCA to make it mandatory for firms to publish the size of their loyalty penalties to consumers “so that they are fully informed”. Historically, new customers of financial services providers have been offered more favourable terms than long-standing ones.
The report criticised banks for closing branches across the UK, which it said disproportionately affects vulnerable customers, such as the elderly or those on lower incomes.
Preserving a branch network should help preserve financial inclusion, MPs said, adding that “taxpayers should not be subsidising the big six banks’ lack of branches”.
Similarly, it criticised the declining numbers of free-to-use cash machines and called for the implementation of former chief financial ombudsman Natalie Ceeney’s Access to Cash Review recommendations.
Failure from the government to intervene over cash machines “risks the UK inadvertently becoming a cashless society”, the ministers said.
The committee also recommended that mainstream banks follow challenger banks such as Monzo in allowing customers to block certain forms of payment, such as gambling transactions. The ministers did recognise, though, that in some instances, financial institutions are limited by a lack of data.
For example, an alcohol purchasing block is possible, although the lack of data means that a supermarket cannot distinguish between an alcohol purchase and anything else. As retailers tend not to share such data, the committee called for the introduction of consented data sharing in the same manner as Open Banking to facilitate such blocks.
Nicky Morgan MP, chair of the Treasury Committee, said: “The importance of financial inclusion cannot be understated. As the World Bank said recently, there can be no end to poverty without financial inclusion.
“The financial inclusion of vulnerable consumers – and we can all be vulnerable at some point in our lives – should be of the utmost priority for financial services providers, the government, and financial regulators. It can no longer be an option for banks to ignore financial inclusion.”