Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of the Financial Services and Markets Bill on (a) preventing the loss of local access to cash and banking services, (b) support for local communities to create banking hubs and (c) protecting free access to cash and in-person banking services.

The way consumers and businesses make payments and interact with their banking continues to develop at pace, bringing significant benefits to those who choose to opt for the convenience, security, and speed of digital payments and banking.

The government is currently taking legislation through Parliament as part of the Financial Services and Markets Bill to protect access to cash. The Bill will establish the Financial Conduct Authority (FCA) as the lead regulator for access to cash and provide it with appropriate powers to seek to ensure reasonable provision of withdrawal and deposit facilities. These powers will allow the FCA to take account of factors it considers appropriate, which could include cost for end users and accessibility.

Following the government’s commitment to legislate, industry is working together to develop new initiatives to provide shared access to cash services. As a result, communities can request an assessment of access to cash in their area by LINK: https://www.link.co.uk/consumers/request-access-to-cash/

The government has welcomed industry’s commitments and, in recognition of these developments, the Bill grants HM Treasury powers to bring the operators of cash coordination arrangements under the FCA’s oversight.

In terms of access to banking services, the government believes that all customers, wherever they live, should have appropriate access to banking services. However, decisions on opening and closing branches are a commercial issue for banks and building societies. The government does not intervene in these decisions or make direct assessments of these branch networks.

Guidance from the FCA sets out its expectation of firms when they are taking decisions relating to the closure of their branches or free-to-use ATMs. Firms are expected to carefully consider the impact of planned branch closures on the everyday banking and cash access needs of their customers and possible alternative access arrangements. This ensures that the implementation of closure decisions is undertaken in a way that treats customers fairly. The FCA expects firms to exercise particular care with vulnerable customers, such as those who are elderly or disabled, and the guidance has recently been strengthened to enhance protections for consumers that rely on branch services.

Alternative options for access can be via telephone banking, through digital means such as mobile or online banking, and the Post Office. Furthermore, industry has committed to new shared bank hubs in 27 locations across the UK to date, in addition to two existing pilot sites. These hubs provide basic banking services, including cash withdrawals and deposits, and a dedicated space where community bankers from participating banks can meet customers of that bank.