Barriers to banking and assisting clients
This page offers an overview of some of the most common form of barriers to accounts and effective banking as identified by Toynbee Hall’s Services Against Financial Exclusion (SAFE). Working in partnerships across
Follow the links on the left hand side to find out more about barriers specific client groups may face and work and projects projects have done to help overcome them how other organisations have assisted specific client groups.
Common barriers
Money laundering regulations – Proving ID and verifying address
Staff communication
Staff knowledge of products
Financial capability of customer (knowledge, skills, confidence)
Fear or mistrust of banks/Don’t see the relevance to them
Geographical/physical restrictions
Money laundering regulations – Proving ID and verifying address
Why it’s an obstacle
In order to open an account at a bank the bank employee will ask to see certain documents to prove who you are and where you live. They are obliged to do this by the Money Laundering guidelines in order to protect you and them against identity fraud. If an account is opened and later used for fraud it is the individual in the bank who opened the account who is liable to receive a fine or prosecution.
Who it may be an obstacle for
Anyone may experience difficulty in providing documents to prove their identity or address at certain points in their life. Certain groups may be less likely to have specific documents – for example an individual who has no regular address will find it more difficult to provide a named utility bill.
What can be done to overcome the obstacle
The interesting news is that the Money Laundering guidelines that banks follow are quite clear in saying: “Some customers may not be able to produce identification information equivalent to the standard…The firm will therefore need an approach that compensates for the difficulties that such customers may face in providing the standard evidence of identity”
There is often a misconception among clients that only certain documents will be acceptable to a bank – for example a passport or photo driving licence – this is not the case! There is a long list of potential documents that can be used to open an account, including items such as a letter from the Department of Work and Pensions (such as a benefits entitlement letter – you can use more than one of these), tax credit entitlement letters from HM Revenue and Customs, or a local authority tenancy agreement. See the SAFE ID Guide for more information on potential documents that can be used.
In addition to this, some larger agencies or those heavily involved with their clients, for example social landlords, can proactively partner with bank branches to provide confirmation of address or identification.
It is important when you go into a bank to ask to see their ‘long list’ of acceptable ID. This may not be advertised upfront, but does exist. If the first member of staff you talk to is unaware of the different types of documents that may be used then ask to talk to someone who does know.
In SAFE’s experience it is rare that an individual will not be able to provide anything to prove their identity and address – persistence with the banks is often the key, and it may well be that what one member of staff says is unacceptable another member in a different branch will accept.
Why it’s an obstacle
When trying to open or use an account its important that banking staff are able to communicate effectively with the customer to ensure that the customer is clear of any instructions given to them and understand any actions that may be required of them. While the training bank staff undertake covers these, the fact is that sometimes an individual member of staff may not be clear in talking to a customer or may not recognise/take account of any additional communication needs they may have. A negative experience due to staff communication can often lead to an individual deciding against trying again.
Who it may be an obstacle for
Depending on the circumstance this may be a barrier anyone can experience. For those who aren’t used to it, bank jargon can be indecipherable. Because they use terms such as ‘credit’, ‘interest’ and ‘APR’ day in and day out bank staff may assume that everyone else will be comfortable with them. Where a client has specific communication needs – for example if their English is poor, they are hard of hearing or may require things explained in simpler terms – the importance of good communication from a member of staff increases.
What can be done to overcome the obstacle
A big part of the solution here requires banks to ensure their staff are properly trained in this and put their training into practice. In terms of working with clients before they go to open an account, it’s important to prepare them for talking to a member of staff making them aware of the questions they may be asked. If there is a foreseeable potential problem, for example a client who has poor English, it may be necessary to accompany them on their visit to the bank. It’s important not to take client’s knowledge of basic financial jargon for granted and if possible explain terms in ‘every day’ English. It’s also important to remember that being unfamiliar with banking terms doesn’t mean a person is unable to grasp the concepts once explained to them.
Why it’s an obstacle
Basic bank accounts can often be the most appropriate account for a person. As these accounts have no credit facility they don’t attract profit in the same way that current accounts do and therefore may not always be promoted as openly as other accounts are. It’s important that staff are aware of their basic bank account products and when they may be appropriate for a customer who does not ask for one specifically, however, there’s a risk that a current account may sometimes be offered above a basic bank account, even when it may not be the most appropriate.
Who it may be an obstacle for
This can potentially be an obstacle for anyone whose needs would be best suited by a basic account but who does not ask for one specifically, most usually because they are unaware that they exist.
What can be done to overcome the obstacle
A client’s needs should be discussed before visiting the bank. If after being made aware of the different options available they decide that they would like a basic bank account they should be encouraged to ask for it specifically. If the agency is able it may be an idea to provide a ‘letter of introduction’, using headed paper and stating that the client (mentioning the name) would like to open a basic bank account at that branch.
Financial capability of customer (knowledge, skills, confidence)
Why it’s an obstacle
If a person lacks the required knowledge, skills and confidence they may fail in their attempt to open an account or be unable to make best use of an account. For example, a person may not know the different options available to them, lack the confidence to challenge bank staff when necessary or lack the skills to use different account features, such as debit cards or direct debits.
Who it may be an obstacle for
In order to open and operate an account effectively a person requires all three of the financial capability components – knowledge, skills and confidence. It can sometimes be easy to take these for granted but the reality is that it can be something anyone may require assistance with.
What can be done to negate the obstacle
Assistance can be offered around all three of these areas – ranging from helping improve someone’s knowledge by talking to them about the different accounts through to using one of the many financial capability resources that have been developed. In addition to resources produced by SAFE, NIACE has also produced material to help with this.
Fear or mistrust of banks/Don’t see the relevance to them
Why it’s an obstacle
Some people decide against using a bank because they feel unsure about how they operate or feel that they’re just ‘not for people like me’. This may be because they have had a previous bas encounter or have a friend or family member who had a bad encounter, they may not have lots of experience interacting with bigger businesses or they may have read negative stories about banks and how they operate. Alternatively, they may just feel that they haven’t needed an account before and they don’t need one now – there’s nothing wrong with this stance, it’s just important to make sure that people are making an informed decision on this and not missing out on any potential benefits having an account could bring.
Who it may be an obstacle for
Anyone may have a negative attitude towards banks, but it can sometimes be the case that the less interaction you’ve had with other structures in society the less likely you are to feel comfortable in a bank or see the relevance an account may have to you. Alternatvely, some people may find it easier to budget day-to-day when operating with cash that they can hold in their hand.
What can be done to overcome the obstacle
A fear or mistrust of banks, or a view that they’re not relevant to your lifestyle, may relate to the financial capability levels of a person. People can be aided with support (such as the financial capability resources discussed above), but it’s important that no-one is told what they should and shouldn’t do. You can provide a person with the relevant information but then it’s up to them to make their own decisions on the basis of that.
Geographical/physical restrictions
Why it’s an obstacle
A person may find it difficult to access a bank either because of a physical disability, the lack of a bank nearby or a combination of both to an extent. Many banks encourage people to use internet or telephone services but not everybody feels comfortable doing this or has access to the internet or a phone. It’s important to note that the lack of a bank branch close by can be an issue in inner-city areas that banks may have deserted just as much as in rural areas.
Who it may be an obstacle for
People living in very isolated rural communities or in poor inner-city areas may not have nearby bank branch. This can be exacerbated by the presence of a physical disability that makes it difficult to leave the house or access certain areas.
What can be done to overcome the obstacle
It may be necessary to help a person access a bank – either by providing transport or other assistance. It is possible to act on behalf of a client – if you are happy doing this and the client agrees to it then there are different ways in which this could happen. It’s therefore best to approach the bank first to ask about making such an arrangement. Alternatively, some banks operate mobile banking services in rural areas. Banks can be asked as to whether such a service exists and if so how to access it.
