Unfortunately, they are still non-committal on what is required. They advise that passwords should be hashed, but there is nothing that makes that a binding requirement.

The gist is still "do what you think is appropriate".

The ICO talks about balancing risks and convenience, and the banks will argue that their systems are secure overall, and don't make the consumer liable anyway.

Under the ICO's guidance, an organisation could argue that plain text (or reversibly encrypted) passwords allow them to do things like password reminders.

You or I might think that's terrible, but they can argue that it's a better user experience.