Great Britain’s financial regulator has just made it harder for banks to shutter branches. The Financial Conduct Authority (FCA) published its “access to cash” rules Wednesday (July 24), requiring banks to hold off on branch closures until they can demonstrate that communities would still have free access to alternative cash sources. “Three million people continue […]
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Great Britain’s financial regulator has just made it harder for banks to shutter branches.
The Financial Conduct Authority (FCA) published its “access to cash” rules Wednesday (July 24), requiring banks to hold off on branch closures until they can demonstrate that communities would still have free access to alternative cash sources.
“Three million people continue to rely on cash, even as digital payments become more popular,” Sheldon Mills, the FCA’s executive director of consumers and competition, said in a news release. “And many small businesses still need somewhere to safely deposit their takings each day. That’s why we’ve acted quickly in response to new powers given to us by Parliament to ensure reasonable access to cash withdrawal and deposits is maintained.”
According to the report, FCA data shows that in the two years leading to June of 2023, 1,358 bank and building society branches closed in the U.K.
To help address cash needs of these communities, the FCA will — beginning September 18 — require banks and building societies to assess cash access and determine if more services are required when changes are being made.
The regulator also wants lenders to respond to residents and community groups “who will be able to request an assessment of whether there are gaps in local cash access” and “deliver reasonable additional cash services, where significant gaps are found.”
Lastly, the FCA said banks must keep facilities, including branches and ATMs, open until any other local cash services are identified.
The FCA’s efforts come at a time when some big banks are expanding their physical presences, with giants such as JPMorgan Chase and Bank of America announcing plans this year to open thousands of new locations.
At the same time, PYMNTS wrote recently that banks were increasingly melding the electronic and physical world, setting the stage “for individuals and businesses to establish more digitally based relationships with their financial institutions.”
As detailed in PYMNTS Intelligence’s most recent “How the World Does Digital” report, 42% of consumers conduct their banking online, with 46.8% doing so through mobile means. About two-thirds of consumers used an app on their phone for banking (mobile banking, 68.6%) or from their desktop with a browser (online banking, 66.6%) at least once a month.
“Banks are examining and re-examining their tech stacks to more fully tap into instant payments, digital account openings and embedded finance, among other initiatives,” PYMNTS wrote.
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