Charity banking challenges

New bank accounts

Problems with opening a new bank account appear to have started with the Covid lockdown when the majority of High St banks were not opening new accounts.   Organisations which needed to open a bank account were having to go down the online banking route which may not always offer the same range of services that a High St bank would, for example, lodging money.   

Over the last few months several High St banks have started to open accounts again, but not all.  Please see attached for a list of High St banks that we know are offering bank accounts to charities.   Please note that it may take several months to open an account.   Please also be careful to find out what charges may be on certain accounts whether you're opting for a bank account online or on the High St.  

Maintaining your bank account

Some charities with existing bank accounts are also reporting having issues with the demands for information that their bank is putting on them to keep their account.  If you have been asked by your bank for updated information, please do not ignore this request and provide the information by the given deadline otherwise the bank may freeze banking services on your account.    

The banking sector must comply with money laundering regulations and so in turn may be asking for more detailed verification from charities about their trustees than they would have done previously.  Various banks have different approaches to adhering to the regulations.    Some banks require detailed information to verify identity of account signatories while other banks are requiring identity verification from all of the trustees of the charity and not just the account signatories.  

Sometimes the language that the bank uses can also be confusing for charity trustees to understand as the bank is coming from a commercial business perspective.  For example, the bank may ask for a significant controller to be named but the financial governance in a charity is the ultimate responsibility of all the trustees.

The update information that the banks are asking for may be required online which poses an issue for those who do not do and don’t want to do online banking.   With some of the banks you need to log in to the account to be able to see the detail of what the bank is asking for.  

Other issues that charities have reported to us, and support networks are that some of the banks have lost their identity verification information that was given in branches, even after all the trustees attended in person to provide this information.   Bank closures in many villages and towns have also compounded the issue leaving it more difficult for charities to access bank services in person. 

Community Banking Project

UK Finance, the umbrella body for banks and finance organisations, set up a working group with our sector to ascertain the issues that charities and the community sector have been having with the banks.  We have had several meetings along with other charity representatives across the UK who are having similar issues with charity bank accounts.  We have highlighted the issues that charities in NI have been having including those issues compiled by the Rural Community Network.

The Community Banking Project will also look at ways in which charities and banks can better understand the specific needs from both parties.