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Banks Must Ensure Access to Basic Banking Services for All Customers
New Guidelines Highlight Importance of Inclusive Financial Services
A new study has revealed that banks must take steps to ensure that all customers have access to basic banking services, regardless of their financial history or income level. The study, conducted in the UK, France, and Belgium, found that only customers with a history of fraud can be excluded from basic banking services in these countries.
Avoiding Discriminatory Practices
The study highlighted the importance of avoiding practices that discriminate against low-income customers. Providers often define the characteristics of their products in a way that is calculated to deter undesirable customers, such as those with a history of financial difficulties. To avoid such practices, it is essential for banks to offer simple and accessible banking services that do not require minimum opening balances or monthly fees.
Essential Banking Services
The study emphasized the need for banks to provide modern means of payment, such as debit cards, and to ensure that these services are easy to use and accessible. In Ireland, for example, a package of basic banking services would include:
- A current account with a monthly statement
- Access to cash machines
- The ability to receive money transfers
Financial Education and Advice
The study also highlighted the importance of financial education and advice for low-income customers. Banks must provide clear information about their products and services, as well as guidance on how to make the most of these offers. In the UK, budget advisors are available to help customers manage their finances, while in Ireland, the Money Advice and Budgeting Service (MABS) provides similar support.
Protecting Low-Income Customers’ Resources
Finally, the study emphasized the need for banks to protect the resources of low-income customers from seizure by creditors. In France, a defined amount considered as a social minimum cannot be seized, and debtors are entitled to ask their bank to make available this amount in cash if it is available before the seizure.
Cost of Basic Banking Services
The study found that different approaches have been taken in the UK, France, and Belgium. In the UK, access to a basic bank account is free, but customers may face high costs if difficulties occur. In Belgium, the basic banking service costs around €1 per month, while in France, the service is free and fees are capped.
Conclusion
The study concludes that banks must ensure that their basic banking services are accessible, affordable, and easy to use for all customers, regardless of their financial situation. By providing inclusive financial services, banks can help to promote financial inclusion and reduce poverty.