Fraud controls protect customers and the wider payments system. But they can also stop a legitimate person from opening, keeping, or using the account they need for wages, benefits, and bills.
On this episode of Regulated Digital, Kate Frankish, Non-Executive Director and Board Chair at Suits Me, looks at how providers can keep strong fraud controls without locking genuine customers out of everyday payment accounts.
Watch the full episode above, or listen on Apple or Spotify podcasts.
Kate has spent her career on customer journeys and payments infrastructure, including product and technology roles in banking and a senior role at Pay.UK, the operator of the UK's main retail payment rails.
She now chairs the board at Suits Me, an electronic money institution that provides money-transmission accounts for people who often struggle to open a mainstream current account.
Generated from episode transcript
Why Legitimate Customers Still Fall Outside Mainstream Accounts
Suits Me began to help seasonal workers, doctors, and other professionals arriving in the UK who could not open an account because they lacked a long rental history, mortgage trail, or permanent address.
The firm later opened to a wider UK market. Typical customers now include people newly arrived in the UK, people with thin credit files, and people with past credit problems.
That gap still matters at population level. The FCA's Financial Lives 2024 survey found around 0.9 million UK adults were unbanked, down from 1.1 million in 2022.
Upfront onboarding checks exist for good reason. Anti-money laundering rules require firms to verify identity, address, and risk indicators so that mule accounts, stolen identities, and other bad actors are harder to bank.
Those same checks can exclude people who are sofa surfing, have no conventional address history, have recently left prison and are trying to rebuild a lawful life, or simply do not fit the data patterns a bank's risk appetite is built around.
"We balance stringent onboarding checks and controls alongside understanding the quite diverse demographic that we bank, and making sure that we can bank as many people as possible."
Kate Frankish, Non-Executive Director and Board Chair, Suits Me
Technology helps when it reduces the need for a punishing paper chase. Pass/fail scoring tools, document checks, and background data let firms set their own risk appetite.
They still leave a hard judgement: protect the firm and the wider system, while giving a genuine customer a workable product.
What Losing An Account Means Day To Day
Most employers no longer pay in cash. Government and HMRC also push towards a digital economy where money can be traced. If someone cannot be paid electronically, or cannot pay by Direct Debit, the costs stack up quickly.
Putting pound coins into an electricity meter can cost more than paying by Direct Debit. For someone already on the breadline, account exclusion becomes a spiral rather than a temporary inconvenience.
There is also an industrial economics problem behind the UK's free-if-in-credit current-account model.
Mainstream banks often cover the cost of a current account through lending and other products. Banking someone who only needs money transmission, and who cannot be charged for it under that model, is commercially difficult.
Electronic money institutions such as Suits Me can charge transaction fees, kept as low as possible, to cover the cost of providing the service. Many customers stay for around two years and then move to a full-service bank. Others keep a Suits Me account alongside a current account to ring-fence spending money.
Why Fraud Controls Still Matter
UK Finance reported £583.2 million lost to authorised push payment (APP) fraud in 2021. Once someone has a money-transmission product, they can move funds quickly. Faster Payments are generally irrevocable once sent.
From October 2024, the Payment Systems Regulator's APP reimbursement rules require sending firms, in most in-scope cases, to repay eligible victims up to £85,000, with costs shared 50:50 with the receiving firm. That strengthens victim protection. It also raises the cost of banking someone who later turns out to be a fraudster or a mule.
Purchase scams, impersonation calls, and romance fraud all push genuine people into sending money they cannot recover from the criminal. The industry needs to bank genuine customers and keep fraudsters out. Genuine customers still get caught in the middle when controls are blunt.
Graded Access Instead Of A Hard No
One practical route is a restricted first product. An electronic money institution already limits how much money customers can hold. A similar idea can work more widely: give a new customer enough functionality for salary, bills, and everyday payments, then open further features once normal patterns appear.
Mainstream providers can use that kind of promotional or graduated journey more often. A customer with a low initial rating can still get digital payment capability while the firm limits exposure. Over time, regular income and bill payments can support wider access.
"Something that allows you basic ability to have digital transactions, without exposing the provider to too much risk while you are proving that you are a genuine customer, might be another way in."
Kate Frankish, Non-Executive Director and Board Chair, Suits Me
That approach remains uneven across the market because of cost, technology investment, and regulatory interpretation. Regulation is guidance that each firm reads into its own risk appetite. High fines make risk functions more cautious. Banks are businesses, not charities. Getting controls, customer outcomes, and commercial viability to line up at once is hard.
What Firms Can Review Now
Where onboarding declines fall on thin files, address gaps, or unfamiliar circumstances rather than clear bad-actor indicators.
Whether a restricted account or staged functionality could replace an outright refusal for borderline-but-genuine applicants.
How quickly a flagged existing customer can be reviewed before an account freeze becomes effective debanking.
Whether decline and restriction communications give customers a usable next step within tipping-off limits.
When an application fails, firms also face tipping-off rules. If the concern is that someone may be a bad actor, the firm cannot freely explain every reason.
Traditional credit problems can be directed towards consumer advice organisations and credit-reference processes.
Suits Me keeps a call centre so customers can speak to somebody and get the help the firm is allowed to give. Some applicants will still be declined because the data indicates too much risk.
Ongoing monitoring is improving. Firms spend heavily on transaction monitoring and real-time stops when activity looks fraudulent. But fraud groups adapt just as quickly.
Banks also cannot carry the whole burden when so many scams start on phone networks, text messages, dating sites, and social platforms. A joined-up response across financial services, telcos, and social media still needs more traction.
Communicating Sensitive Account Decisions By Email?
Learn how Mailock helps financial services firms protect sensitive messages, verify recipients, support secure replies, and track delivery.
Account restrictions, fraud reviews, and restored access all create sensitive customer communication. The wording has to be careful. The channel still has to reach the right person, keep evidence intact, and give the customer a clear route back into the process.
"When a firm restricts or reviews access, the customer still needs a clear, protected way to understand what they are able to do next if they are a legitimate service user."
Paul Holland, Founder and CEO, Beyond Encryption (Mailock)
That is why communication design sits alongside fraud and access controls, not after them.
Payments Infrastructure Still Shapes Who Gets Served
Looking ahead, the UK's National Payments Vision and the work now underway to modernise retail payments infrastructure, with the Bank of England closely involved, remains an important backdrop.
The practical view from payments operations is simple: payments do not matter until they stop working, and when they stop, everything else stalls.
Better fraud and risk data can also make onboarding quieter for genuine customers. New indicators that work in the background, rather than forcing people through more paperwork, are the direction the market needs.
The board-level task is to measure both sides of the balance: fraud losses and false positives, declines and restorations, customer outcomes and commercial cost.
Strong controls remain essential. So does a route into everyday payment accounts for people who are not fraudsters, just hard to fit into an existing model.
FAQs
What Is An Electronic Money Institution?
An electronic money institution can issue e-money and provide money-transmission services, but it is not a bank and cannot describe its product as a current account in the same way a bank can. Firms such as Suits Me use that model to offer everyday payment accounts to customers who may struggle to open a mainstream bank account.
Why Do Fraud Controls Sometimes Exclude Legitimate Customers?
Onboarding and monitoring tools look for identity, address, credit, and behavioural risk indicators. People with thin files, unstable addresses, past credit problems, or unusual but lawful circumstances can fail those checks even when they are not bad actors. Firms then have to weigh inclusion against the cost of letting a fraudster into the payments system.
What Changed Under The UK's APP Reimbursement Rules?
From October 2024, in-scope sending payment firms generally have to reimburse eligible victims of Faster Payments and CHAPS APP scams up to £85,000, with costs shared 50:50 with the receiving firm. That improves victim protection and increases the commercial pressure on firms to keep fraudsters and mule accounts out.
What Does Graded Access Mean For A New Customer?
Graded access means giving a customer limited payment functionality first, then expanding features once regular income and spending patterns support a lower risk view. It can reduce the need for an outright decline while still capping the firm's exposure.
Sam Kendall works on digital marketing for Mailock by Beyond Encryption, helping build B2B marketing activity around research, first principles, and sustainable growth. He writes about marketing effectiveness, positioning, customer communications, and digital culture, with longer-form work published at ATNL.net.
Sam Kendall
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