Government update on plans to protect access to cash and banking hubs

The Government has provided an update on its plans to ensure Britons have proper access to in-person banking and cash. Lord John Taylor questioned in Parliament about the measures being taken “to improve access to banking services for individuals who rely primarily on cash because of digital exclusion”.

This query follows research suggesting that 33 parliamentary constituencies could be left without a local bank branch by the end of 2024. Over 6,000 bank branches have shut down since 2015 due to the rise in online banking.

In response, Lord Spencer Livermore stated that the Government is “committed” to preserving access to cash for both individuals and businesses. He highlighted that the Financial Conduct Authority (FCA) is responsible for ensuring people have sufficient access to cash.

The regulator has the authority to ensure “reasonable provision of cash withdrawal and deposit facilities for individuals and businesses, including free withdrawal services for individuals”. Lord Livermore elaborated: “The FCA published its final rules on access to cash on 24 July. Under its rules, designated firms will be required to undertake assessments of a community’s cash needs following the closure of a service or a community request, and to put in a new service if necessary.

“These rules come into force on 18 September. The Government also recognises the importance of banking services to communities and high streets and has committed to work closely with the banks to roll out 350 banking hubs over the next five years.” The previous Government also urged banks to maintain in-person services for their customers.

Former Treasury minister Bim Afolami responded to a question in Parliament in January, stating: “It is imperative that banks and building societies recognise the needs of all their customers, including those who still need to use in-person services. The impact of branch closures must be mitigated where possible so that all customers, wherever they live, continue to have appropriate access to banking services.”

Mr Afolami clarified that guidance from the Financial Conduct Authority (FCA) requires banks to consider the impact of planned branch closures on their customers’ everyday banking and cash access needs and to provide reasonable alternatives. He further added: “This seeks to ensure the implementation of closure decisions is done in a way that treats customers fairly. Where firms fall short, the FCA may ask for closures to be paused or other options to be put in place.”

“Alternative options to access everyday banking services can be via telephone banking, through digital means such as mobile or online banking and via the Post Office or banking hubs. The Post Office allows personal and business customers to carry out everyday banking services at 11,500 Post Office branches across the UK, and banking hubs.”

Many of the leading banks, including Barclays, TSB, Santander, NatWest, HSBC, Lloyds, Nationwide, Virgin Money, Dansk, and Bank of Ireland UK, now provide their services via these increasingly essential banking hubs.