Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 3 March 2025 to Question 33105 on Banking Hubs, whether she has the power to change the assessment criteria used by LINK to establish new banking hubs.

Banking has changed significantly in recent years with many customers benefitting from the ease and convenience of remote banking. While branch closures are commercial decisions for banks, the Financial Conduct Authority (FCA) guidance expects firms to carefully consider the impact of planned branch closures on their customers’ everyday banking and cash access needs and put in place alternatives where reasonable. This seeks to ensure that branch closures are implemented in a way that treats customers fairly.

Where firms fall short of expectations, the FCA may ask for closures to be paused or other options to be put in place. Where alternative services have been recommended, a branch cannot close until any recommended services are in place.

The Financial Services and Markets Act 2023 granted the FCA the responsibility and powers to seek to ensure the reasonable provision of cash withdrawal and deposit facilities. Under the FCA’s regime, LINK, the operator of the UK’s ATM network, is responsible for undertaking access to cash assessments. When a cash service such as a bank branch closes, or if LINK receives a request directly from a community, LINK assesses a community’s access to cash needs and can recommend a new service, such as a banking hub.

The Government has no powers to intervene in decisions to open new banking hubs, and the criteria for access to cash assessments is a matter for LINK, the financial services sector and the FCA. The FCA is required by law to keep its access to cash rules under review and is monitoring the impact of these rules on an ongoing basis to ensure they deliver the right outcomes for businesses and consumers.