In an effort to ensure sustained access to cash, the FCA has introduced a set of new regulations aimed at banks and building societies.
According to Finextra Research, starting next month, these financial institutions will be required to conduct thorough assessments of local cash access whenever they consider closing branches or ATMs. This comes as a response to concerns over dwindling physical banking facilities, which could leave significant gaps in cash access for both individuals and small businesses.
Under these rules, banks must engage with local communities and organisations to assess the necessity of maintaining existing cash access points. If significant gaps are identified, the institutions are obligated to keep branches and ATMs operational until alternative solutions, such as banking hubs or advanced ATMs capable of receiving deposits, are established.
Sheldon Mills, executive director of consumers and competition at the FCA, highlighted the delicate balance the new rules aim to achieve. “Three million people continue to rely on cash, even as digital payments become more popular. And many small businesses still need somewhere to safely deposit their takings each day,” Mills noted. He further explained that while the FCA’s powers won’t outright prevent the closure of bank branches, they will play a crucial role where such closures would create significant voids in service availability.
The newly finalised rules build on the initial proposals set out by the FCA, extending the timeline for assessments and incorporating a two-year review period to ensure that communities have adequate time to express their needs and for adjustments to be made accordingly.
These regulations apply to 14 designated banks and building societies and represent a proactive step by the FCA to align banking infrastructure with evolving consumer needs and technological advancements, ensuring that cash remains accessible to those who depend on it the most.
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