Financial inclusion, or access to affordable and useful financial services, is essential for our modern-day living. Access to payment accounts or bank accounts is a cornerstone of financial inclusion. It enables access to other essential services, such as receiving salary or pensions, social benefits, paying rent, making purchases at more favourable rates, paying bills, and accessing other financial services, including credit. Basic bank accounts move consumers from unbanked to banked.
The importance of basic bank accounts is recognised by the EU. Directive 2014/92 on the comparability of fees related to payment accounts provides a right to access payment accounts with basic features (Article 16), laying down minimal rules for Member States on providing access, ensuring affordability and raising awareness.
While the objective of the Directive is to facilitate access to basic bank accounts across the EU, the 2023 Report from the European Commission on the application of Directive 2014/92 and the 2024 report from Finance Watch on Breaking down barriers to basic payment accounts suggest the Directive falls short of meeting its objective.
The Finance Watch study relied on mystery shopping to provide a real picture of what is happening in the EU, based on examples of selected Member States, Spain, Germany and Romania. It has been found that:
- Basic bank accounts are often not affordable, e.g. in Germany, fees can reach up to £150, and in Spain, basic bank accounts are more expensive than standard accounts;
- These accounts are frequently not accessible; e.g. banks often impose documentary requirements such as a work contract, which then leaves out the unemployed, a poof of address that prevents homeless people from accessing these accounts. Often, these accounts cannot be opened online, and banks fail to offer them proactively; instead, consumers are pushed to ask for these accounts, explaining their own vulnerability;
- Perhaps most shockingly, the study shows little awareness of basic payment accounts. Bank staff are often unaware of these accounts or their eligibility, and there is little and hard-to-access information that consumers can access themselves.
Ten years after the adoption of the Directive, many, often the most vulnerable groups, are prevented from accessing these accounts. According to the World Bank Findex (which has no data for Luxembourg), in 2021, 3.6% of Europe’s population were financially excluded. The highest number is recorded in Romania, where 30.9% of the population aged 15 or more did not own a bank account. They are followed by Bulgaria (16%), Hungary (11.8%), Croatia (8.2%), Portugal (7.4%), Cyprus (6.87%), the Czech Republic (5.6%), etc.
These recent results signal the need for a more robust European
legal regulatory framework that strengthens the above duties of access,
affordability and awareness, and a need for better enforcement of the
existing national rules.
