Access to Banking Services: A Professional's Perspective
We continue our series on access to banking services, with a member's perspective on the changing ways in which banking is delivered. Chartered Banker Institute Fellow Mike McArthur FCBI considers the implications for in-person services and financial inclusion, including the practical challenges faced by those seeking access to a bank account and the range of responses currently available. The views expressed are those of the author and do not necessarily represent the views of the Chartered Banker Institute.
Access to Banking Services: A Professional's Perspective
In the late 1980’s the UK could claim one of the world’s most extensive banking networks, with a population of 57 million in 1986 supported by a network of 21,000 bank and building society branches.
Branch staff knew their customers and the community. Experience and information, both formal and informal, were shared, and face to face discussions were the order of the day. Phone calls were answered by staff in the branch, who also undertook the day-to-day servicing responsibilities of customer’s accounts.
However, since 1986 a significant number of bank branches in the UK have closed. By 2024 the total had fallen to fewer than 7,000 and has reduced further since. There are a number of reasons for this, the growth of digital banking, the rise of ATM’s and self-service technology, and bank mergers and acquisitions which have led to the closure of duplicate locations.
To put the scale of these closures into a global context, a technological advanced country such as the United States, with a population of 340 million has 76,000 banking offices, an average of 5,900 individuals per office. Based on the figures above the UK average, with a population of 70 million, is now 10,200 individuals per office: a poor comparison.
Undoubtedly the closure of Bank branches has created a vicious circle: the more that close the more customers move online, and with fewer people relying on High Street branches, more of them close.
Benefits
Of course there are benefits associated with these closures:
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Lower costs can increase a bank’s profitability.
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These resources can then be invested to improve technology in the face of increasing competition from digital-only banks.
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This in turn provides greater convenience for customers who prefer digital services.
So, with these clear benefits of online banking, and many customers unable to remember the last time they set foot in a bank, what are the disadvantages?
Drawbacks
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Reduced access to cash and face-to-face financial advice is a real concern.
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There is reduced access to banking services particularly in rural and disadvantaged urban areas.
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Branch closures can cause greater inconvenience for older people, people with disabilities, and those without reliable internet access.
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Customer must also bear the cost of mobile phone and laptop or other devices through which to access accounts online.
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Potential negative impacts on local businesses that rely on nearby banking services.
There are also around 1 million adults in the UK who do not have a bank account and are therefore financially excluded. The resulting problems for this population are many, and include:
Receiving income: Employers and government agencies usually prefer or require wages to be paid into a bank account,
Paying bills: Many utility companies, landlords, and service providers encourage payment by Direct Debit. People paying in cash or by payment voucher may face fewer options and sometimes higher costs.
Limited access to credit: Banks are less likely to lend to someone without a current account or banking history. This can leave people relying on more expensive forms of borrowing such as loan sharks,
Difficulty renting housing: Many landlords and letting agents expect tenants to pay rent electronically and may ask for bank account details during the application process.
Problems shopping online: Most internet purchases require a debit or credit card or another electronic payment method, making access to potentially cheaper online shopping more difficult.
Reduced financial resilience: Saving securely is harder without an account, and there is no access to banking tools such as standing orders, account alerts, and budgeting apps.
Challenges proving identity: Having a bank account can help establish proof of identity or address for other services. Without one, opening new accounts or accessing certain services becomes more difficult.
Individuals can be unbanked for many reasons, including unemployment, very low income, experiencing homelessness or other forms of social exclusion. So, without the comfort of a discussion with friendly staff at a nearby bank branch, what are the options available to becoming financially included?
The banking sector and regulators recognise these issues and have undertaken various initiatives to support and enable financial inclusion, including the following:
Basic Bank accounts: These provide essential features such as receiving payments, making Direct Debits, using a debit card, and withdrawing cash. Providers will check ID and residency, however these banks must offer a basic bank account to eligible residents, including people with poor credit histories or who have been declared bankrupt, unless fraud is involved. Whilst twelve banks state that they provide this service, only two provide it on request. Elsewhere, individuals must first to apply for a full bank account and be refused.
Building or rebuilding a credit score for the future: Showing that you can stay within a credit limit can demonstrate to lenders that you are a responsible borrower and may provide access to borrowing at better rates in the future. A credit-builder credit card is designed for those with low/no credit scores. These cards generally have lower limits and fewer benefits, but regular payments can build or rebuild a credit score. A credit-builder loan can serve a similar purpose. A credit-building app may report regular payments such as rent payments, subscriptions and bills. All of these products require a bank account; therefore, their impact on financial inclusion is limited.
Borrowing money in the short term: Loans may be available to those with limited or impaired credit histories. However, they come with higher interest rates, lower borrowing amounts and strict affordability checks. Typical rates from Lenders specialising in this sector range from 49.9% APR to 99.9% APR. Again, a UK bank account is a necessity.
Buy Now Pay Later providers: Buy Now Pay Later (BNPL) is a payment option through which a provider pays the retailer upfront for a purchase, and the consumer repays the provider over a set period. These repayments are automated via debit card or bank account, with approval generally involving a soft credit check. The BNPL provider charges retailers a fee for each transaction made using its services, allowing the provider to earn revenue, helping merchants to increase sales and offering customers payment options that are often interest-free.
Popular BNPL providers include Klarna and Clearpay. In addition to offering interest free options over 90 days, Klarna offers credit over 6-24 months at a typical APR of 21.9%. Late fees apply if payments are missed. In July 2026, BNPL became regulated in the UK, providing extra consumer protection, including overspending checks.
High street bank overdrafts: As of 2026, most UK banks are no longer able to charge separate fees for unauthorised overdrafts, following FCA regulation changes that came into effect in April 2020, aimed at simplifying overdraft pricing and making it fairer. As banks are also no longer to charge for unpaid Direct Debits, standing orders etc. they have responded to the reduction in income by increasing overdraft rates to around 35% - 40% APR, with some risk-based pricing as high as 49.9% APR. The Competition and Markets Authority (CMA) has been approached with a request to investigate overdraft pricing across the banking sector.
Lenders and finance providers in the community: Credit Unions state that they are more willing to accept non-standard addresses and work with individuals to rebuild their finances. Currently their scale of operations means a relatively limited impact on financial inclusion overall. In January 2026, a trade body-led UK wide Credit Union Growth Plan was launched. Its aim is to provide a roadmap for the expansion of the credit union sector through reform, investment and support. Whilst the stated ambition is to double membership and treble lending across UK credit unions by 2035, this still may not achieve significant scale. There is also limited evidence available to suggest that credit unions alone can substantially address the needs of the financially excluded population.
Data from Citizens Advice and others identify a number of distinct groups that are most impacted by not having a bank account. These include:
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Prisoners and ex-offenders
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Refugees
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People experiencing homeless or with no fixed address
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Victim-survivors of domestic abuse, particularly financial and economic abuse
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Undischarged bankrupts
From these impacted groups, specific assistance, generally in the form of pilots, has been implemented. An example concerns victim-survivors of domestic abuse. In 2025, HM Treasury announced a system-wide reform of how “coerced debt” should be treated in credit files, working in partnership with lenders, charities and credit reference agencies. This is still a work in progress. The challenges include how to verify abuse safely (without putting victims at risk) and avoiding fraud or misuse of the system.
So, with a range of Banking initiatives in place, albeit with mixed impact, what is the experience of those who wish to become Financially Included when attempting to access in-person banking services, for which a bank account is often a pre-requisite?
Mystery Shopper Exercise
In July 2026, the FCA published the results of a mystery shopper exercise carried out with banks in relation to opening of Basic Bank Accounts (BBA). The exercise deliberately used scenarios in which the consumer presented characteristics that were clearly relevant to BBA eligibility and suitability, rather than scenarios involving consumers simply comparing account options. The focus was on consumers who could benefit from a BBA but might not know about them.
Unfortunately, the exercise found that while some banks are doing a good job, too many consumers are still facing unnecessary barriers, delays and confusion when trying to access an account that could help them manage their money and participate in everyday economic life. Alarmingly one-third of the experiences involving basic bank accounts were rated as poor or very poor.
The survey also found that, in the two years to May 2024, 10% of the 1.3m adults who recalled applying for a BBA said they were declined. This also does not take into account customers who did notget as far as making an application. Further action is therefore needed to ensure that those who remain unbanked, many of whom are among the most vulnerable, can access a bank account.
Summary
Despite the positive message by Financial Institutions such as Nationwide Building Society, which has committed to keeping all 696 of its branches open until at least 2030, bank branch closures continue. Whilst this has led to the creation of Banking Hubs, the planned total of 350 remains small in relation to overall number of bank branch closures.
Conversations around personal finance struggles which would previously have taken place in bank branches increasingly involve volunteer organisations such as Citizens Advice and Christians Against Poverty. The Mystery Shopper exercise demonstrates that even when bank staff are involved, knowledge of the services available to this population can be lacking. To address this, the banks require continued investment in the education and development of their people, supported by organisations such as by the Chartered Bankers Institute
Banks manage the lifeblood of the economy, and their stability relies directly on public support and bailouts during crises. Because of this privilege, they have a deep-seated obligation to prioritise long-term societal well-being alongside shareholder profit. There is a strong public consensus that banks should ensure that vulnerable or low-income individuals have fair access to basic accounts and services, rather than focusing only on the most profitable demographics.
Ultimately, while the law may permit banks to operate primarily as profit-driven entities, public trust and reputation depend entirely on their ability to act as responsible corporate citizens, which, in this banking professionals view remains an area where significantly more progress is needed.