Banking on change
Think tank: Social Market Foundation
Author(s): Scott Corfe
February 16, 2022
This report from UK think tank the Social Market Foundation looks at expanding the role of banks and building societies in supporting financial resilience.
The pandemic has exacerbated existing financial inequalities in the UK and weakened financial resilience, especially among the most vulnerable people. This briefing explores the role of the retail banking sector in boosting financial resilience among customers. Currently, the banking sector often acts to the detriment of financial resilience, especially among financially vulnerable customers. Given that banks and building societies are uniquely placed to improve financial resilience – holding enough data to be able to gauge financial distress – they need to be in greater competition in to deliver high-quality financial wellbeing services. Further policy recommendations include: making banks ‘prompt’ their customers every two years to either confirm their existing current account arrangements or consider ‘switching’ to another provider; introducing new financial resilience partnerships and social prescribing to combat the mental health impacts of financial difficulties; and empowering customers to share their vulnerabilities in order for banks to provide better support.