Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of bank closures on access to (a) cash and (b) in-person services in Wellingborough constituency.

Decisions to open or close a branch are commercial and the Government does not make assessments of these closure decisions. Nonetheless, it is imperative that banks and building societies recognise the needs of all their customers, including those who need to use cash or in-person services. The Government is monitoring the wider situation closely.

The Government legislated through the Financial Services and Markets Act 2023 to introduce a new legislative framework to protect access to cash. The Financial Conduct Authority (FCA) must seek to ensure that there is reasonable provision of free withdrawal and deposit facilities in relation to personal current accounts. Upon the closure of a core cash service such as a bank branch, LINK assesses the community’s access to cash needs. If additional cash services are needed, industry will provide a shared solution such as a Banking Hub.

Guidance from the FCA sets out its expectation of firms when they are deciding to reduce their physical branches or the number of free-to-use ATMs. The FCA’s guidance is clear that firms are expected to carefully consider the impact of planned branch closures on their customers’ everyday banking and cash access needs, and put in place alternatives, where this is reasonable. 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.

UK Finance have recently confirmed 225 Banking Hubs will be announced by the end of 2024, up from the 130 locations currently confirmed. Furthermore, following my recent discussions with the UK high street banks, participating firms have also committed to improving Hubs by standardising the services available between firms, ensuring that customers will not require their own digital device to bank, trialling a ‘customer liaison service’ and trialling Saturday openings.