Tuesday, August 31, 2021View Showroom
In a month's time, the UK government’s Access to Cash consultation will close.
Ahead of the September 23rd deadline, the drumbeat of bank branch closures and loss of ATMs has not decreased. Most of the major banks like HSBC and Lloyds are shuttering more branches across the country this year, eliminating access to cash and quality financial services in all kinds of communities, urban, rural and remote. There have been some recent attempts to improve access to cash.
The Financial Services bill became law in July and this allows for retailers to offer cashback without a purchase. On paper this could allow customers who prefer to pay in cash, access to cash in those areas exited by banks.
The fly in the ointment of this new law is that retailers will need to be authorised or registered with the Financial Conduct Authority (FCA). Not all retailers will want to do this and certainly the idea of a local corner shop or pub wanting to be FCA regulated seems far fetched to me. Also, don’t we already have businesses, namely banks, who are regulated to provide free access to cash in our communities.
The other pressure is whether access to cash should be a universal service obligation for banks to operate in the UK. The charity Age UK has made this call in the last few months because they see millions of older and vulnerable people cut off from ATMs and banking services. This also contributes to some falling victim to financial abuse.
There is real merit to the Age UK proposal. It is evident that despite the rise in ATM and bank closures, there still remains an appetite for cash as important parts of the UK economy still heavily rely on it. Access for all communities is critical. Like water it could be considered a vital utility and providers should be obliged to allow easy access to it.
The current situation makes me ask how is it that banks like to repeatedly ask me to go paperless but have never asked if I am ready to go branchless. I am not and neither are millions of others.
Banks should consider how innovative self-service banking technology, combined with assisted service and remote service could be used to retain cost effective bank branches. This could serve as a focal point for financial and other community services, and be a shared resource. Or how handing over the ownership of the own ATM fleet to a separate entity, through ATM Pooling can help reducing operating costs while ensuring widespread cash services. This is especially appropriate for customers in locations where relatively low demand would render a branch or duplicated bank ATMs uneconomical.
In this way legacy banks can be rejuvenated, maintain a bespoke service, meet current demands and create new revenue streams while rationalising ATM locations and also meeting changing customer behaviours and demands. And while the moral duty should be clear and may require the force of law, the business case is also compelling.