The Government has issued an update on plans to ensure adequate in-person banking and access to cash is retained.
Lord John Taylor asked in Parliament what steps are being taken “to improve access to banking services for individuals who rely primarily on cash because of digital exclusion”.
The question comes after research came out suggesting 33 parliamentary constituencies could be left without a local bank branch by the end of 2024.
More than 6,000 bank branches have closed since 2015 as people increasingly do their banking online.
Lord Spencer Livermore responded to say the Government is “committed” to protecting access to cash both for individuals and for businesses.
He pointed out that the Financial Conduct Authority (FCA) is the regulator tasked with ensuring people have adequate access to cash.
The regulator has powers to ensure “reasonable provision of cash withdrawal and deposit facilities for individuals and businesses, including free withdrawal services for individuals”.
Lord Livermore explained: “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 called on the banks to retain in-person services for their customers.
Former Treasury minister Bim Afolami said in January in response to a question in Parliament: “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 explained that guidance from the Financial Conduct Authority (FCA) requires the banks to consider the impact of planned branch closures on their customers’ everyday banking and cash access needs, and to provide reasonable alternatives.
He 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 major banks now offer their services through the banking hubs, including Barclays, TSB, Santander, NatWest, HSBC, Lloyds, Nationwide, Virgin Money, Dansk, and Bank of Ireland UK.
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.
