BANKS will be banned from shutting down too quickly under new rules to help people access cash.
Under the policy, launched by the UK’s financial watchdog, banks will be required to plug the gap for customers impacted by rise in physical branch closures.
The Financial Conduct Authority’s (FCA) ruling will come into effect on September 18th.
However, the changes cannot prevent the closure of bank branches but instead ensure banks offer alternatives for customers.
The FCA will also require banks and building societies to listen to concerns from local communities and provide additional services or keep facilities open for longer until new options are available.
The news comes as more than 6,000 bank branches have closed over the past decade, forcing customers to switch to online or app-based banking.
Major banks say that there are fewer customers who are using in-person services, with more people preferring to use mobile and online banking.
But the FCA said its research found that around three million people still rely on cash, with lower-income households most likely to be excluded from online banking and more reliant on cash.
A recent investigation by The Sun found that a number of high street lenders require their customers to have at least an iPhone 6S – released less than a decade ago – or above just to get access to their money.
The FCA said its new rules will require banks and building societies to fill gaps in cash access with measures such as banking hubs, ATMs and Post Office facilities.
Banking hubs, which were created in response to rapid branch closures, offer traditional shared services in new locations across the UK.
They consist of a counter service operated by Post Office employees, where customers of any bank can withdraw and deposit cash, make bill payments and carry out regular banking transactions.
Currently, there are just 60 locations in relation to the 450 banks that have closed down.
Cash Access UK, the business rolling out these hubs, has plans to open 14 new sites over the next 12 months.
Elsewhere, banks will also need to assess the needs of local communities and make sure they are responding to residents and groups that raise concerns.
Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, said: “This is a landmark move by the FCA, benefitting segments of society that still rely on cash to pay for their everyday living needs and the many small businesses that need to be able to safely deposit their daily takings.”
Alastair Douglas, chief of TotallyMoney explains why it is always worth looking at your options..
“IF you’re not happy with the service being provided by your bank then it’s worth looking into your options, and finding one which better suits your needs.”
“Loyalty doesn’t pay, and with the Current Account Switch Service Guarantee, your payments and balance will be moved over automatically, and your old account will be closed for you. So, you won’t need to worry.”
“Access to cash and the ability to use notes and coins in consumer transactions has become a particular challenge for the elderly, the less digitally capable, the unbanked and those on low incomes, who rely on cash to manage their finances.”
But Martin Quinn campaign director at Payment Choice Alliance said the plan does not go “near far enough”.
“The public has lost 6,000 bank branches in the last nine years, a few banking hubs just won’t cut it,” he said.
“What is needed is a complete moratorium on bank branch closures, because what’s to stop the big 5 closing more between now and September 18th.”
He added: “Millions of people rely on the banks for cash access and small businesses will continue to need to need their local bank branch to deposit cash takings and order change for their till floats.”
If a recent bank or building society closure has left you without one nearby, you may have some alternatives.
You can carry out most basic banking tasks at your nearest Post Office, although you won’t be able to apply for a loan or open a new bank account there.
You can find your nearest Post Office branch by using the locator tool on its website.
Meanwhile, many banks offer a mobile banking service – where they bring a bus to your area offering services you can usually get at a physical branch.
Other banks use buildings such as village halls or libraries to offer mobile banking services.
It’s worth contacting your bank to see what services they have available, and when they might next be in your area.
Last month it was announced that new super ATMs would launch in 17 UK locations where branch closures have left residents unable to access essential banking services.
The ATMs will allow customers to withdraw funds, access their balance, change PIN numbers and deposit cash.
Bank of Scotland, Barclays, Halifax, Lloyds, NatWest, Royal Bank of Scotland and Ulster Bank are already signed up to allow deposits, at the super ATMs, with more banks set to sign up soon.
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