Consumer Scotland is recommending a package of interventions across governments, regulators and the financial services sector to tackle financial exclusion, improve access to key products and services and prevent consumer harm.
The recommendations follow a new Consumer Scotland report highlighting that, while many consumers successfully use financial services, too many continue to face barriers accessing key services including banking, credit, insurance, pensions and financial advice.
These challenges can create barriers to some consumers’ ability to participate fully in the economy , including higher costs for essential services, reduced access to credit and greater difficulty managing everyday financial transactions.
Financial exclusion is frequently linked to other forms of disadvantage, including low income, disability, poor health, lower levels of digital access and reduced financial resilience.
The report also highlights concerns about consumers' ability to resolve problems when they arise. More than half of consumers who attempted to complain about a financial services issue found the process difficult or were unable to complain at all.
A range of measures are already being taken to improve outcomes, including the UK Government’s Financial Inclusion Strategy, regulatory reforms, action to protect access to cash and access to credit, and wider work by governments, regulators, financial services firms and advice organisations.
However, Consumer Scotland is recommending a package of further measures to address persistent challenges that consumers are facing: .
Key issues identified in the report include:
Continuing decline of access to in-person banking: Scotland is the first part of the UK where more than half of all bank and building society branches have closed. A total of 751 branches shut between 2015 and 2025, with closures particularly severe in rural and island communities.
The continuing importance of cash: Around 280,000 people in Scotland rely on cash for everyday transactions, while increasing digitisation of financial services risks creating additional barriers for consumers who face digital exclusion.
The report makes 11 recommendations including:
- The UK Government and the Financial Conduct Authority (FCA) strengthening protections for access to banking and cash services, particularly in Scotland's rural and island communities
- The UK Government establishing a stronger framework for access to banking services following its review of in-person banking, and considering whether the FCA should have additional powers in relation to branch closures
- The FCA ensuring reforms to mortgages, high-cost credit and buy now, pay later products deliver better outcomes for consumers and are backed by robust monitoring and enforcement
- The FCA considering whether it has sufficient powers to improve access to insurance and protection products, particularly for consumers in vulnerable circumstances
- The UK Government considering further action to tackle consumer harm caused by unregulated financial advice and information shared online
- The FCA and the Financial Ombudsman Service ensuring the complaints and redress system remains accessible, proportionate and easy for consumers to navigate
- The Scottish Government developing a national Financial Inclusion Action Plan as a way of improving coordination across government, regulators and industry and addressing the causes of financial exclusion
Head of Consumer Markets Fraser Stewart said:
"Financial services are essential to participating in Scotland’s economy, but too many consumers still face barriers accessing the products and support they need.
"While governments, regulators and industry have taken important steps in recent years, significant gaps remain. The risks are often greatest for consumers who are already experiencing disadvantage, including those on lower incomes, people who face digital exclusion, and many living in rural and island communities.
“Financial exclusion is not just about access to services. It can mean paying more, having fewer choices, and finding it harder to resolve problems when things go wrong.
“Our recommendations set out practical actions that governments, regulators and industry can take together to reduce consumer harm and create a more inclusive financial system."
Background
Consumers and financial products and services
The report draws on Consumer Scotland’s analysis of consumer research, regulatory data, stakeholder engagement and evidence from advice services to identify priority areas for reform and future policy development.
Consumer Scotland will use the findings to inform its ongoing work with governments, regulators and industry to improve outcomes for consumers across Scotland.