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Summary
- The Financial Conduct Authority has asked the banks to rethink over their decision of branch closures.
- HSBC announced it would be closing 82 branches this year.
The fears that vulnerable customers would not be able to access the banking services has prompted UK financial regulator Financial Conduct Authority (FCA) to ask all leading British banks to reconsider their decision to shut down branches.
Even when the lockdown was imposed earlier, the FCA had said the same thing that the banks should either avoid or at least delay the branch closures if they are unable to assess the needs of customers or provide alternative arrangements after closures. In case a bank did plan for a branch closure, the FCA has issued a set of guidelines in September 2020 on how they should be treating their customers during such a situation.
Earlier this month, HSBC had announced that it would close 82 branches during the year. Since the beginning of the pandemic, The Trustee Savings Bank (TSB) and the Co-operative Bank have also announced branch closures.
(Image Source: © Kalkine Group 2020)
The UK’s consumer group Which? stepped into the matter and has urged the biggest banks to publicly commit to maintain cash access, giving a two-week deadline to confirm the same, particularly for those who customers mainly rely on cash.
Anabel Hoult, the chief executive of Which?, wrote letters to eight big banks in Britain emphasising on the fact that the coronavirus pandemic has put enormous pressure on the cash network and they should reconsider their decision. These financial institutions included Barclays, Halifax, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander UK, and the TSB.
A research carried out by Which? indicated that nearly 10 million people were not yet ready to completely give up using cash. Hence, it wants the institutions to take immediate action to ensure that the physical money remains a viable payment option. It also highlighted that 3,300 free-to-use cash machines have closed down across the UK since the beginning of 2020 and a total of 13,000 ATMs have been closed in the last three years.
The consumer body said that there has been no introduction of a detailed timetable by the government yet, despite the legislation being announced to protect cash in last year’s Budget. The slow pace of progress is creating a dangerous vacuum, it noted.
Hoult said that it is important for the banks to continue to be part of the existing access schemes so that the cash available is not left to erode. He asked the UK government to clarify its timeline for the application of new laws to protect access to cash.
This week, the FCA said that with the individual fee decisions being modified, it is thinking of increasing the limit for contactless payments to £100 from £45.
