Big banks put on notice with new rules on branch closures as 6,000 sites shut down
New rules will be put in place to rein in bank branch closures
GETTY/PA
High street banks have been put on notice about the current rate of branch closures sweeping the country by the UK's financial services watchdog.
The Financial Conduct Authority (FCA) has informed financial institutions will need to do more to protect peoples' access to cash if branches are shut down.
New rules outlined by the FCA will come into effect from September 18 but these new powers will not stop bank branch closures from taking place.
The regulator will instead be able to require banks and building societies to ensure they are "plugging significant gaps" in cash access for communities.
This can involve participating in the rollout of banking hubs, new ATMs or offering services provided via the Post Office.
Communities have been decimated by the "alarming" rate of bank branch closures with 6,000 sites shutting down since 2015, according to Which?
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
The high street will be hit by more closures again this year as 55 bank branches shutPAAmong the major banks to shut down branches in recent years include NatWest, Royal Bank of Scotland, Santander and Barclays.
Notably, Nationwide Building Society has pledged to continue to offer banking services in any communities it has a branch in until 2028.
Big banks and building societies have claimed less customers are using in-person services, with more people opting to use mobile and online banking.
Despite this, the FCA has cited research that notes three million Britons still rely on cash, with lower-income households at risk of becoming disenfranchised.
Sheldon Mills, the FCA’s executive director of consumers and competition, explained: "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.”
The FCA has shared its new rules will force banks and building societies to fill gaps in cash access with measures including banking hubs, ATMs and Post Office facilities.
Going into the General Election, Labour pledged to rollout hundreds of banking hubs across the country which allow staff from several banks to share the same physical space.
Economic Secretary to the Treasury Tulip Siddiq said: “Cash continues to play a vital role in the lives of millions of people and businesses across the country, so I welcome the FCA's new rules.
"Our commitment to roll out 350 banking hubs will also help provide local communities with access to the critical banking services people rely on."
LATEST DEVELOPMENTS:
Bank branch closures are continuing at an 'alarming rate', according to Which?GETTY Even with the FCA's recent intervention, experts have questioned whether the regulator's new rules "go far enough".
Andrew Martin, the founder and CEO of SMEB, said: "The FCA has confirmed that it still won’t be able to prevent the closure of bank branches.
"We also need to understand what the FCA constitutes as the ‘reasonable provision’ of cash deposit and withdrawal services.
"In my opinion, the only acceptable standard is easy and reliable access to banking services in every town across the UK. Until this is achieved, local businesses and communities will suffer."