FCA to get new powers to guarantee access to cash

The government on Wednesday said it would legally guarantee access to cash as banks increasingly shut branches in the digital age.

“Millions of people across the UK will benefit from new legislation to protect access to cash,” the Treasury said in a statement.

Under the legislation, the Financial Conduct Authority (FCA) “will be granted new powers” over Britain’s biggest lenders to “ensure that cash withdrawal and deposit facilities are available in communities across the country”.

As part of its consultation response, the government has confirmed that it will proceed with its proposals to enable Treasury to specify geographic baselines for reasonable access to cash withdrawal and deposit facilities across the UK.

Noting that vulnerable groups in particular still relied on cash, Economic Secretary John Glen said:

“I want to make sure that people are still able to use cash as part of their daily lives, and it’s crucial to ensure that no person nor community across the UK is left behind as we embrace a more digital world.”

About 5.4 million adults in Britain rely on cash “to a very great or great extent in their daily lives”, according to the Treasury.

But the closure of UK bank branches continues apace.

Lloyds on Wednesday announced plans to shut 28 branches, two months after revealing it would permanently close 60 other sites.

It comes after customers increasingly switched to online banking amid the Covid pandemic.

Consumer group Which? predicts about 5,000 UK bank branches, around half the total, will have disappeared between 2015 and 2022, with Scotland worst affected.

The Association of Convenience Stores (ACS) has welcomed the plans to introduce the legislation.

Findings from ACS’ 2021 Local Shop Report show that consumers think that two of the most valuable services offered in convenience stores are cash machines and the Post Office.

“We welcome further detail on the how the Treasury plan to legislate for access to cash and delivery of a flexible criteria for cash provision between urban and rural areas,” ACS chief executive James Lowman said.

“Cash is still an incredibly important way of paying for goods and managing money for millions of people, and convenience stores play an increasingly important role in being often the only provider of ATM services locally. One of the most effective ways to promote access to cash would be to ensure banks provide adequate funding for a viable ATM network, yet this has been cut in recent years.”