Barclays forced to turn away new clients (2024)

Barclays is turning away applications for bank accounts from all but the smallest companies as it struggles to find staff to complete checks designed to prevent financial crime.

The bank has had limited capacity for opening new business accounts for more than four months, The Times understands, and is likely to continue to reject companies with more than one director until at least next month.

It is understood to have limited opening capacity for companies requiring anything beyond very basic “bank mandates”, the list of people in a business who are authorised to manage its bank accounts.

The reason is that Barclays has had to move staff to a team that is refreshing “know your customer” due diligence checks on existing business customers. Regulated entities are required periodically to update their records regarding the true ownership of corporate clients to reduce the risk of money laundering and other financial crime.

The Financial Conduct Authority is aware of the activity, but Barclays indicated that the City regulator had not instigated it. It blamed a shortage of staff available to complete the due diligence work.

Barclays’ business account openings have been limited since late August. The bank has since reopened to sole traders and single-director businesses, but it indicated that its ability to deal with applications from companies with several directors would be restricted for some weeks. The issue does not affect personal bank accounts.

Several banks stopped opening new business accounts during the pandemic after a deluge of applications from companies seeking credit under the bounce back loan scheme. Other than during that unprecedented period, it is highly unusual for a big bank to restrict applications from such a large swathe of businesses for an extended period.

Barclays’ know your customer work is not thought to be related to pandemic finance schemes.

A Barclays spokesman said: “We remain open for applications for start-ups and switchers that are sole traders and single-director limited companies. These can be made through our easy-to-use digital applications in our app or online. We do, however, have limited opening capacity for accounts for multi-director small businesses while colleagues focus on serving existing banking clients. We hope to have increased capacity in the coming weeks so that we can welcome all new small business customers.”