Can we bank on the banks? New report highlights ongoing challenges

In 2022, NCVO conducted a survey to better understand the challenges facing charities and voluntary organisations.

These findings, published in a detailed report in January 2023, revealed widespread administrative and communication issues. Alongside the report, we shared the findings in a news piece that highlighted the urgent need for change.

Since then, NCVO has been working behind the scenes, engaging with sector leaders, regulators, and banks to advocate for improvements to banking services. To build on this work, we conducted a follow-up survey in early 2024.

The results, published in a new report from the Charity Finance Group, show that banking services continue to fall short of meeting the sector’s needs.

The challenges facing voluntary organisations are extensive and persistent.

Administrative challenges

Our survey revealed that 92% of respondents faced at least one banking issue in the past two years. Key challenges include:

• Updating signatories: 77% reported issues adding or removing signatories from their accounts. This process, often required annually due to trustee turnover, is unnecessarily complex and time-consuming.
• Dual signatories: Over a third (35%) struggled to set up dual signatories for payments, a requirement recommended by the Charity Commission for financial oversight.
• Lost information: 32% experienced delays because banks misplaced documents previously submitted, leading to duplicate work.
• Opening accounts: 29% faced barriers to opening accounts, including excessive requests for trustee information. Some banks required details for all trustees, even those not listed on the account mandate.
• Unexpected account closures: Worryingly, 6% of organisations had accounts permanently closed, while 11% reported losing access to their funds due to account freezes or cancelled debit cards, often without explanation.

Communication barriers

Beyond administrative issues, poor communication compounds the difficulties charities face:

• 26% said compliant documents were rejected without clear reasons.
• 24% were asked for non-existent documentation, such as a “certificate of registration.”
• 27% reported that banks failed to explain their requirements or provide clear information when resolving issues.

Wasting precious time

Over half (56%) of respondents said they spent excessive time managing banking problems, and 12% reported spending more than three hours per week on these tasks.

For smaller organisations, this time could have been better spent delivering vital services.

Banking challenges aren’t just administrative – they also have a broader impact on the voluntary sector.

Over half (54%) of respondents said banking issues caused significant stress for trustees and volunteers. This strain is contributing to trustee retention challenges, as highlighted in NCVO’s 2024 Trustees’ Week findings.

Four-in-five charities are experiencing board vacancies. Banking challenges may further deter potential trustees from stepping forward.

Despite the introduction of the Consumer Duty regulation in 2023 – which requires banks to ensure fair outcomes for all customer groups, including small charities – 83% of survey respondents were unaware of its existence.

This highlights a critical gap in communication and implementation.

Read more about what Consumer Duty means for charities in our insights piece.

Since our 2022 report, NCVO has been working to improve banking services for the voluntary sector. Our efforts include:

• Developing guidance: We partnered with UK Finance to create the Voluntary Organisations Banking Guide. This practical resource helps charities navigate account setup, maintain good communication with banks, and understand key requirements.
• Engaging with regulators: We contributed to the FCA’s investigation into “de-banking,” ensuring that the unique challenges charities face were included in their findings.
• Advocating with MPs: Banking challenges were raised at the All-Party Parliamentary Group for Charities and Volunteering in June 2023, drawing attention from policymakers.
• Raising awareness: Collaborations with media outlets like The Guardian and The Telegraph have brought national attention to these systemic issues.
• Collaborating with charity regulators: In November 2023, the Charity Commission, OSCR, and CCNI wrote an open letter to UK bank CEOs, urging them to address barriers for charities.

The findings make it clear: the banking sector must do more to meet the needs of the voluntary sector.

Charities, banks, government, and the regulators will all need to work together to shift what has proved to be a complex set of challenges.

We’re calling on banks to:

1. Work collaboratively with NCVO, UK Finance, and other sector leaders to improve processes and communication.
2. Explore basic accounts tailored to charities, similar to those available for individuals in France and the Netherlands.
3. Prioritise financial inclusion, ensuring that banking services are accessible to all charities, especially smaller organisations.

Banks must move beyond compliance and take proactive steps to address these persistent issues.

NCVO understands the strain banking issues place on voluntary organisations. That’s why we offer resources and support to help charities navigate these challenges.

Need support?

Take a look at our financial management resources, which includes specific guidance on banking.