The Financial Conduct Authority (FCA) has said banks could do more to support people interested in opening a bank account, after finding that many banking providers could make the process of applying for one easier.

A new FCA report has called on banks to raise awareness of basic accounts, which allow you to make and receive payments but do not offer an overdraft.

It also requested that account providers review their approach to rejecting and closing accounts to ensure that vulnerable consumers are not restricted.

Earlier this year, in response to a wave of complaints, the previous UK government proposed a bill that would have forced banks to notify customers and provide them with an explanation before closing their accounts.

“Opportunity for improvement” – FCA

Commenting on the report, Sheldon Mills, executive director of consumer and competition at the FCA, said the regulator had seen examples of “really good practice” but also noted “areas where there is still room for improvement”.

“By sharing both, we want to achieve more consistent outcomes,” he added, “if people were aware of which accounts might be suitable for them, there would be more support for those at risk of exclusion, and people would not be denied access without a valid reason.”

This follows a similar report from last year that found no evidence of account providers closing customers’ accounts because of their political beliefs or other views.

Today’s report does not provide any further evidence of this, but it did ask senior executives at the companies to sign a declaration to confirm they are compliant.

The issue of account closures came under the spotlight in 2023 after UK Reform Party leader Nigel Farage claimed Natwest-owned Coutts was trying to “deprive him of access to his bank accounts” partly because of his political views.

The chief executives of Natwest and Coutts have resigned in the wake of the scandal.

In May, a group of lawmakers called on the city’s watchdog to force banks to be more transparent about why they are “liquidating” businesses, amid criticism that lenders are stifling growth and innovation among small firms.