Nicola McBain from OSCR takes us through the regulator's banking guide

Recently, at our events and through emails, we’ve seen an increasing number of concerns raised with us about the service that charities receive from banks. Why did this concern the Office of the Scottish Charity Regulator (OSCR)? What could we do to help?

Firstly we looked into the concerns and from speaking to charities, banks and sector bodies we’ve identified five key ‘banking’ issues:

1. A lack of understanding from banks about the sector, particularly the operating environment for smaller charities.

2. The complex and lengthy process some charities find when they look to change their signatories.

3. The complex and lengthy process some charities find when changing legal form.

4. General difficulties when trying to open bank accounts.

5. Charities’ own lack of knowledge and preparation in supporting their banking relationship.

We want to encourage an improved relationship between charities and their banks

Nicola McBain

So yes, there was a remit for OSCR. The issues being highlighted had the potential to lead to ineffective financial management, and with respect to charities changing legal form, banking issues can act as a barrier, complicating our own processes for charities.

So how could we help? This is an area OSCR knew we could not tackle alone, and with partners including the Scottish Council for Voluntary Organisations, the British Banking Association (BBA) and Charity Finance Group we worked on guidance for charities and banks that could help towards building a better relationship.

Launched in March 2016,Banking for charities was published. The document builds on an existing BBA leaflet applicable to England and Wales and sets out key questions to ask banks and options to help charities navigate the banking environment.

Providing key information on banking including choosing and opening the right bank account, understanding banking charges and fees, and how to switch accounts, it is a useful tool for charities and other voluntary organisations to help them understand the banking landscape and help make informed banking decisions.

In terms of guidance for banks we are nearing the completion of an infographic ‘A Bankers Guide to the Voluntary Sector’ which we intend to promote for use in all bank branches. This will outline the size and scale of the sector and explain key terminology.

On top of this, OSCR continues to liaise with the banks where trends in concerns arise. We have updated key pieces of our guidance and have sent information to banks to highlight Scottish Charitable Incorporated Organisations.

Overall, we want to encourage an improved relationship between charities and their banks and we believe that the best way to achieve this will be to work in partnership with the banks and the charity sector. Trustees are responsible for the general control and management of their own charity, with financial management a vital part of this. And, as regulator, it matters to us that this is made as easy as possible.

Nicola McBain is OSCR’s head of registration.