By 
The Financial Conduct Authority (FCA) has introduced new rules requiring banks and building societies to address gaps in local cash access, such as branches and ATMs, and to fill any significant voids identified in community access to cash services.
Under these new regulations, banks must consider the needs of local residents and community organizations when planning to close branches or ATMs. They are required to assess and report whether such closures would leave significant gaps in cash access. If gaps are found, banks must maintain these services until alternative solutions are in place.
Sheldon Mills, FCA’s Executive Director of Consumers and Competition, emphasized that while the new rules won’t prevent all branch closures, they will ensure that closures do not leave significant gaps in cash access.
“Three million people continue to rely on cash, even as digital payments become more popular. And many small businesses still need somewhere to safely deposit their takings each day,” Mills said. “That’s why we’ve acted quickly in response to new powers given to us by Parliament to ensure reasonable access to cash withdrawal and deposits is maintained.”
Since January 2015, banks and building societies have closed 6,058 branches, representing about 61% of the branches open at the start of 2015. There are already 410 closures scheduled for 2024, with another 61 planned for 2025.
To address the gaps in cash access, Mills suggested various measures, including banking hubs, new deposit ATMs, and Post Office facilities.
The new rules, set to take effect next month, will apply to 14 designated banks and building societies. They include changes from the FCA’s initial access to cash consultation, such as extending the period for conducting cash access assessments and introducing a two-year review period to give local communities more time to present their cases.
Consumer advocacy group Which? has cautiously welcomed the new rules. Rocio Concha, Which?’s Director of Policy and Advocacy, said, “It’s encouraging that the FCA is moving forward with this plan. It must now be prepared to closely monitor how banks and building societies are behaving and step in with enforcement action if they are falling short of what is needed to maintain cash access in communities.”
Concha added that while banking hubs are likely the future of banking in place of shuttered branches, their rollout has been too slow for consumers to feel the benefit. She called on the government to fulfill its commitment to open at least 350 new hubs in the coming years and to revise that total upwards if necessary.
Comments