A review to help protect access to face‑to‑face banking across the UK is being launched.
Commissioned by Lucy Rigby, Economic Secretary to the Treasury, the review will gather evidence on the impact of branch closures, identify who is most affected, and look at where further action may be needed to protect access to banking services.
It follows the announcement of the Enhancing Financial Services Bill in the King’s Speech, in which the Treasury intends to include a power to be able to act swiftly if the evidence supports intervention on access to banking services.
Many bank branches have vanished from high streets over the years as people turn to digital ways to manage their finances.
Banking hubs, where several banks share a single space, have been helping to plug the gaps, alongside post offices, where many customers can do their day-to-day banking over their counters.
Ms Rigby said: “We are supporting industry’s rollout of banking hubs, but we also need a clear picture of where communities are still losing out.
“This independent review will show us where the problems are and what further action may be required – and we will move quickly to legislate where the evidence shows it is needed.”
The Access to Banking Review will be chaired by Richard Lloyd, who will provide a report and recommendations to the Government by October.
Mr Lloyd served as a non-executive director of the Financial Conduct Authority and as executive director of Which?.
He said: “Banking is an essential service that every consumer and community in the UK needs.
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“That’s why it’s so important to take stock of the impact that the big shift to digital services has already had, and to understand the need for access to in-person banking in the future.
“I hope to hear from as wide a range of views as possible, and welcome the Treasury’s commitment to taking action, should this independent review find evidence that new legislation is needed.”
Gareth Oakley, chief executive of Cash Access UK, said: “While cash usage continues to decline as digital payments expand, we’ve seen first-hand how important local access to cash and face-to-face banking is for many households and businesses.
“Our job is to deliver solutions where these are needed, and to date we’ve opened 237 banking hubs and over 140 deposit services.
“We look forward to contributing towards the review and working with Government.”
Sarah Harrison, chief executive of the Building Societies Association, said: “Building societies and credit unions are rooted in local communities and provide more than one in three high street branches.
“As customer needs change, building societies are continuing to meet these both by investing in digital channels as well as innovating in high street branches and the use of community spaces – so it’s the customer’s choice of how and when to engage.
“We welcome the Government’s Access to Banking Review and look forward to contributing.”
Caroline Abrahams, charity director at Age UK, said: “This review is very welcome as we hear regularly from older people who find their bank branch shuts and it then becomes very difficult for them to manage their money.
“While there are strong rules around cash access, banking services are less well protected, and we’ve long argued that access to face-to-face services should be put on a statutory footing as well.
“We look forward to working with the review team as they explore the best ways of safeguarding these essential services.”
A UK Finance spokesperson said: “The way people choose to bank is changing, but the banking industry remains committed to ensuring continued access to banking services for those who need it.
“Alongside branches, we are rolling out shared banking hubs across the country, and many everyday banking services can also be carried out at the Post Office.
“We look forward to contributing to Richard Lloyd’s review and supporting the Government as this important work progresses.”
Helen Undy, chief executive of the Money and Mental Health Policy Institute, said: “This announcement is extremely welcome.
“For many of us with mental health problems, face-to-face banking services are hugely important in our day-to-day lives.
“It can make a big difference in helping people who struggle with online banking to get cash, budget and stay in control of their spending.
“But too many people find that their closest bank branch is miles away and inaccessible via public transport.
“And if you have a mental health problem, it can be an impossible task to get specialist support from your bank on the phone or online.
“We’ve consistently raised these issues with government and we’re delighted that the Treasury has responded and is taking this issue so seriously.
“This is also a great opportunity to consider how better, more accessible digital banking can be part of the solution alongside in-person services.”
Rocio Concha, director of policy and advocacy at Which? said: “People and communities losing access to face-to-face banking services is a serious problem.
“Which? research has highlighted the scale of bank branch closures across the UK and the significant impact this is having on communities.”