A European-wide study on financial services and products
needed to tackle financial exclusion of citizens
Access to financial services is increasingly necessary to participate in modern life and is aright under the European Pillar of Social Rights. Yet financial exclusion remains a serious problem in the EU, especially for vulnerable groups who lack the legal documentation, the financial means, or the ability to access financial products.
The EU’s Payment Accounts Directive (PAD) aims to ensure that citizens can access a basic payments account. So far, there is no equivalent framework for other essential financial services and products, such as savings and insurance. This report argues that the EU could reduce financial exclusion by helping citizens to access a minimum basket of basic and essential financial services.
Using surveys, interviews and workshops conducted in multiple EU member states, we find that the products considered most essential and worth including in this minimum basket are:
• a payments account
• access to cash
• a savings account
• a safe third pillar pension product
• motor insurance
• health insurance
• home insurance
• personal liability insurance
We analyse why these particular products matter for financial inclusion and how this varies between Member States. We recommend practical steps for improving access to them, including through changes to the Payment Accounts Directive, EU Accessibility Act, PEPP Regulation and Consumer Credit Directive.
The survey also concludes that household credit should not be considered as an essential basic financial service, despite its prevalence, and that policymakers should do more to ensure that consumer credit is fair and not exploitative. We make recommendations to prevent exploitation and improve credit assessment processes.