In a world where you can pay bills and transfer money at the touch of a button, or buy something using your phone, banking seems more accessible than ever.
But that’s not the case, according to research from Pockit, a new challenger bank
According to the research, nearly one in eight Britons have been turned down for basic banking services in the last two years.
Pockit, which offers an account open to everyone that can be used to pay in wages or benefits, as well as withdraw cash at ATMs, found that 12% of adults had been turned down for basic services including current accounts, debit cards and online banking in the past two years.
It means those people are effectively excluded from things that could save them money like direct debit and online shopping.
Of those surveyed, 44% thought they were rejected for basic banking facilities by banks because of their poor credit record and 40% of those respondents attributed their poor credit rating to low income.
The scale of rejections underlines the need for innovative alternatives to traditional banking, Pockit said.
The challenger bank took part in a recent summit on financial inclusion, where delegates found that traditional banks’ application processes and regulation are among the biggest barriers to financial inclusion.
At the Financial Inclusion Summit, which involved 250 experts from traditional banks, investors, FinTech (financial technology) groups, challenger banks, universities, charities and advice groups, nearly one in five (19%) delegates said traditional banks’ application systems were the biggest barrier to inclusion.
Another 20% cited the impact of regulation on individuals and companies as a barrier.
Around two out of three delegates said FinTech companies were the most effective enablers of financial inclusion compared to 33% who believe traditional banks are.
Virraj Jatania, CEO and co-founder of Pockit, and one of the key speakers at the summit, said: “The key to tackling financial exclusion is to understand financially underserved customers and developing simple and easy to understand products.
“Keeping the proposition simple is massively important. Above all financial education is vital to ensure that people are supported.
“We need the government to help us and we need the financial system to be opened up, particularly around the payment structure, and we also need the right regulation to adapt.
"It’s vital to let the financial services sector know that this group of people should not be overlooked.
“Everyone should be able to carry out everyday banking tasks in a manner that enables them to take control of their financial future without being penalised.”
Pockit allows customers to fund their account with cash at more than 28,000 locations across the UK, as well as by debit card and bank transfer.
It is planning to expand its services to offer account numbers, contactless cards and direct debits in the coming weeks.