UK banks and building societies are now obliged to assess cash access and understand if additional services are needed, when changes are being made to local services.
In addition, the new FCA regulations require banks to:
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- respond to local residents, community organisations and representative groups, who will be able to request an assessment of whether there are gaps in local cash access;
- deliver reasonable additional cash services, where significant gaps are found, and
- keep facilities, including bank branches and ATMs, open until any additional cash services identified are available.
Industry reaction
Andrew Martin, CEO and Founder of SMEB
Government action to protect cash access in the UK is long overdue, and it’s only right that the FCA enlist the help of the banks who caused the problem in the first place. We hope that these new rules will better protect communities from becoming banking deserts – especially those in rural areas.
But do the rules go far enough to make a real change? The FCA still won’t be able to prevent the closure of bank branches. We also need to understand what the FCA constitutes as the ‘reasonable provision’ of cash deposit and withdrawal services. In my opinion, the only acceptable standard is easy and reliable access to banking services in every town across the UK. Until this is achieved, local businesses and communities will suffer. If the new government is serious about fixing the UK’s banking deserts, the FCA should also be looking at how they can bring in the private sector to support their efforts.
Paul Riseborough, Managing Partner, UK and Ireland, Capco
We welcome the FCA’s new rules, which come into force today, for banks and building societies to protect local communities’ access to cash. Access to cash continues to be a key part of the wider financial system, and while digital alternatives work for many, cash remains an important part of the financial lives of some, especially vulnerable customers who struggle to embrace digital means. Today’s rules will be vital in protecting these customers, and the FCA’s update regarding their impact so far is especially promising.
With the FCA’s focus on protecting the consumer only increasing by the day, it is vital that banks and building societies stay focused on aligning with these rules and demonstrating how they are supporting all their customers.
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By GlobalDataStart with data
As banks and building societies modernise their services, including their branch and ATM networks, it’s important that they look to use more data and insights to inform their strategies. On top of their own operational data, they should focus on bringing in insights by engaging with local communities, businesses, and customers – as well as from market research experts. This will provide robust and tangible evidence to inform change and could even help them spot new opportunities.
Innovate
Banks and building societies should continue to actively explore opportunities to innovate and partner with others to improve communities’ access to cash. Alongside the opportunity to share costs and risk, technology and data can help unlock new opportunities to meet customer’s needs, for example, through automated deposit and withdrawal solutions, banks can use data to better predict and provision services more efficiently, making viable banking hubs.
Be part of the solution
Too often, banks and building societies are chastised from withdrawing from communities and leaving those that need them most behind. By leaning in and actively engaging with their customers and communities to listen, experiment and learn what cash services work best for consumers, banks and building societies can start to reset the ‘doom loop’ narrative of ever declining support and help for customers.
Mark Aldred, the retail banking expert, Auriga
The FCA’s access to cash rules for how banks close banks and ATMs come into force on 18 September and only a few days after the UK’s biggest bank Lloyds announced another 25 branch closures. Surely the stable door has been shut after the black horse bolted.
While the FCA consultation has led to some improvements in what was originally proposed, there is no real pressure on banks to retain physical access to cash and, as importantly, wider access to financial services in communities. It still allows them to claim that Post Office counters provide an alternative when they simply do not.
Perhaps a new government that has said it wants more banking hubs opened much faster will mean the FCA will be more proactive on pressing banks to communicate earlier and do much more to transparently explain their decisions. But even the recent approval of a further 350 new Hubs will not address the imbalance, or how hubs over focus on access to cash ignores many of the other branch based services that are being lost. As customers are finding, it is what is inside a hub in terms of access to your bank’s experts when you need them rather than when they are rostered to be available, that’s important. Simply having a hub on the High Street isn’t enough.
Face to face and physical banking channels remain key and if banks preach customer centricity, they should do more to preserve and even improve them.
Some banks like Nationwide do recognise the importance of branch-based services and are investing to stay on the High Street.
So, it would be good if the FCA asked banks to be more ambitious and imaginative in their branch and ATM network strategies. There are technology and management solutions that can make High Street banks profitable again.
