Banks will no longer be able to close branches or cash machines without showing how customers can keep access to money and services, watchdog rules
- The Financial Conduct Authority wants to continue access to banks and ATMs in the High Street for customers
- Financial institutions are cutting back on their branch network across the nation with 22% closed since 2012
- The South West has been hardest hit with 27% of High Street institutions closing in the period 2012-2019
- Banks have been accused of abandoning those who need face-to-face services to increase their profits
Firms considering closing bank branches or ATMs should carefully consider the impact on their customers’ everyday banking and cash access needs, including any alternative arrangements that may be available, the City regulator has said.
The Financial Conduct Authority (FCA) has published draft guidance to ensure customers are treated fairly.
The watchdog set out its expectations for banks, building societies and credit unions when they are considering closing branches or ATMs, or converting a free-to-use ATM to fee charging.
The Financial Conduct Authority is planning new rules to regulate the manner banks can close branches and ATMs or convert cash machines from free-to-use to charging to protect access for people who require face-to-face services
As well as loosing access to branches, many communities face a lack of cash machines as ATMs are removed or converted from free-to-use into fee charging
The House of Commons Library has produced figures showing the number of bank and building society closures across the UK since 2012
The FCA said that treating customers fairly should include considering what alternatives can be provided to customers.
This could include sharing services with other providers or supporting customers to use digital services.
The regulator also expects firms to communicate their plans clearly to customers.
Sheldon Mills, interim executive director of strategy and competition said: ‘Access to cash is a priority for the FCA.
‘While in the recent climate we have seen some consumers move to digital payments, we have also seen the importance of the continued availability of cash to many consumers, including those most vulnerable.
‘We welcome the Government’s plans to legislate as a longer-term solution, and the work the industry is doing already to maintain cash.’
The consultation closes on July 30.
Gareth Shaw, head of money at Which? said: ‘It is right that the FCA has stepped in to address the issue, and it must be clear that the industry cannot respond to the changes in how people bank by abandoning those who rely on cash or a face-to-face service.
‘The Government also now needs to play its part and urgently introduce its legislation to protect access to cash.’
According to a briefing report by the House of Commons Library, in 2019 there were 10,405 bank or building society branches in the UK.
The report found that between 2012 and 2019 the number of high street financial institutions had fallen by 22 per cent.
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