As part of People & Places’ wider work to help councils and communities revitalise town centres, here we provide updates about a top local concern -retaining the right to bank on your High Street. This article offers a round-up of recent moves to safeguard town centre banking services, including proposals produced this week by the UK’s financial watchdog to guarantee easy access to cash.
Access to cash
The Financial Conduct Authority (FCA) has introduced new rules from September 18th, 2024 requiring banks to help maintain access to cash, rather than full banking services.
Under the FCA’s new rules, free withdrawals and deposits need to be available within one mile for people living in urban areas. In rural areas, where there are concerns over “cash deserts”, the maximum distance is three miles.
Rising use of cash
Introduction of the new rules comes as the British Retail Consortium reported the first rise in cash payments in a decade. Cash was used in 19% of purchases in 2022, up from 15% the previous year, and is thought to be as a result of people managing their finances more carefully. Until 2015, notes and coins were used in more than half of transactions.
Limited impact on bank closures
The FCA’s new powers don’t prevent bank branches from closing. However, the rules may delay closures where branches are a key local source of cash. Lenders must ensure they do not close cash facilities, including bank branches and ATMs, until extra services are available.
The FCA’s earlier consultation showed that in the two years to the first quarter of 2023, the right to bank on your High Street has been hit by the closure of 1,391 bank and building society branches and the loss of 2,176 free-to-use ATMs.
The FCA says the new rules will work in harmony with its existing guidance on bank branch closures.
Last branch in the Peak District
This week the BBC reported that the leader of Derbyshire Dales District Council has called on NatWest not to leave some people feeling “isolated and disconnected” by closing its last remaining banking branch in the Peak District.
Inequalities in banking use
Last year a report from Age UK report revealed that three in four account-holders aged 65+ want to carry out at least one transaction in a physical banking space. This is equivalent to 7.86 million people.
Age UK’s report, ‘You can’t bank on it anymore’, showed that age, gender, income level and social grade were all key factors in determining how comfortable people feel about online banking.
As part of the solution, Age UK called on the banks to accelerate the roll-out of Shared Banking Hubs to meet the high and continuing demand for face-to-face banking services.
Alternative service through Banking Hubs
Banking Hubs offer a more complete alternative to retaining the right to bank on your High Street, that the new FCA proposals. A Banking Hub is a shared banking space, like a traditional bank branch but with banks working on a rotating basis across the week. The hubs have a counter service where customers of all main banks can withdraw and deposit cash, make bill payments, and carry out regular banking transactions.
According to Age UK, Banking Hubs have so far worked extremely well and are proving popular though they are keen for the roll-out to speed up to avoid more communities becoming ‘banking deserts’.
Roll-out of Banking Hubs
After a slow start piloting the approach, we heard at the Association of Town and City Management Summer School, how the roll-out of Banking Hubs is accelerating. From a base of 7 Banking Hubs at the start of 2023, it is expected that a further 22 premises will be open across the U.K. by the end of 2023. A further 33 Banking Hubs are expected to open in the first half of 2024.
Cash Access UK provides updates on the progress of all proposed Banking Hubs across the UK.
Assessing need for a Banking Hub
There are two ways for the need for new Banking Hubs to be assessed.
Whenever a participating bank or building society makes a change to its network (such as a branch closure or reduced opening hours) it notifies LINK in advance. LINK will then assess the location’s needs, looking at what other services are available locally, the size of the location (people and number of shops) and determine whether the community needs a new hub.
In addition, a community can also request a review itself. LINK will then independently assess the needs of that community using the same criteria. Barton-upon-Humber in Lincolnshire is the first announced hub that will be created after the community requested the service.
A Banking Hub’s story
For those of you who are curious to see what a banking hub looks like and operates like in reality, you can read the story of how the U.K.’s fourth banking hub came in to being in Cottingham, East Riding of Yorkshire.
While People & Places have been involved in planning for a revitalised Buckingham town centre over the summer, it has been great to watch the conversion of the former Lloyds Bank in the Market Square into a Banking Hub.
Universal banking access through Building Societies
Another option for maintaining universal access to key banking services including access to cash and the ability to make deposits, is using advanced technology hosted by a Building Society. As our sample case studies of the integration of OneBanx technologies into Building Society services in Thatcham and Knaresborough shows, this new approach assists customers in accessing banking services where banks have closed their branches. The service seeks to:
- Facilitate cash deposits and withdrawals for most UK banks.
- Provide an inclusive, in-person, and assisted banking experience that bridges the gap between in-person and digital services.
Banking and books in Knaresborough
The OneBanx kiosks offer the flexibility to be hosted in partnership with community-based services in a town centre. In Knaresborough, customers from all banks can perform everyday banking transactions from within the Newcastle Building Society branch in the town library using the OneBanx kiosk.
An important benefit of the ability to deposit cash into most High Street banks through this option, is it stops small businesses from being forced to go cashless. It therefore offers financial inclusion benefits for people who prefer to use cash to help manage their budgets.
A joined-up approach to revitalising town centres
This round-up on the right to bank on your High Street is part of People & Places wider work to create understanding and address key town centre issues. It is one of a number of key concerns regularly brought-up by local businesses and customers as part of our work to help councils and communities to “bring facts and faces to town centres“.
People & Places are authors of the Local Government Association’s revitalising town centres toolkit. This toolkit includes practical guidance on the ‘how’ and the ‘what’ of town centre revitalisation through work that we lead such as reopening East Suffolk’s towns and planning for recovery in Letchworth.
This five-minute video presentation gives an overview of an evidence-led approach to town centre recovery and revitalisation using the example of our pioneering work with Selby District in North Yorkshire.
Contact services@people-places.net to find out more about how People & Places can help plan for the revitalisation of your town centre.
