The UK's financial regulator has some bad news for the nation's biggest banks: they've been failing their most vulnerable customers, which is a bit like a lifeguard forgetting how to swim. The Financial Conduct Authority (FCA) says banks have been pushing homeless people and those in financial hardship toward unsuitable online applications instead of offering them basic bank accounts - the no-frills, no-overdraft accounts designed specifically for people who might otherwise be locked out of the banking system entirely.

More than four million people in the UK rely on these free accounts, offered by a who's who of British banking: Barclays, The Co-operative Bank, HSBC, Lloyds Banking Group (plus Halifax and Bank of Scotland), Nationwide Building Society, NatWest (including RBS and Ulster Bank), Santander, TSB, and Virgin Money. These accounts allow users to receive wages and benefits, pay with debit cards, direct debits, and standing orders, and are available to those with bad credit, bankruptcy, or official debt recovery plans. Some even offer help for homeless people by working with charities to confirm identity.

But a mystery shopping exercise by the FCA rated a third of experiences with basic bank accounts as poor or very poor. Out of 298 interactions across branches and by phone, only 28% were rated good or very good, 38% were fair, 20% were poor, and 14% were very poor. Specific problems included failing to offer these accounts to people who needed them - especially those with no fixed address - and pushing vulnerable customers toward online applications that were unsuitable for their needs.

Emad Aladhal, the FCA's director of retail banking, put it plainly: 'Bank accounts are important for financial inclusion, and this is about making sure the very people who could benefit from basic bank accounts are not missing out.' The nine banks have now agreed to: provide the right account for customers first time, make it easier for people without standard ID or a fixed address to open an account, and offer alternatives to online applications for vulnerable customers.

Peter Tyler, director of personal banking at trade body UK Finance, acknowledged the problem: 'We recognise that more can be done to ensure consistently good outcomes for everyone.' He pointed to the Breaking the Cycle scheme, where banks work with housing charity Shelter to help people with no fixed address access an account. So, progress? Maybe. But for now, the FCA's report suggests that some banks still need a reminder that 'basic' shouldn't mean 'barely accessible.'