Selaine Saxby is MP for North Devon.
Close to 6,000 bank branches have disappeared from our high streets in the last few years, and it is estimated that nearly three million people will live in a constituency without a bank branch by the end of 2024. At the same time, data suggests that the UK’s highstreets will lose 24,500 free-to-use ATMs in less than ten years, as the network contracts and banks remove duplicate machines.
The communities we represent – particularly those without large urban centres – are running out of places to access both their cash and vital, face-to-face financial services.
This reduction of access profoundly affects both consumers and businesses. We know that around three million people in Britain still use cash for every transaction they make; in 2022, usage of cash increased for the first time in 13 years, as people used it as a budgeting tool to deal with the cost-of-living crisis.
Furthermore many businesses, particularly SMEs, continue to rely on cash transactions. Driving miles to deposit cash earnings is not only bad for these businesses, but also for the communities they serve.
In my own constituency of North Devon, I have seen the closure of every traditional bank north of Barnstaple. Ilfracombe, the second largest town, should qualify for a Banking Hub – but is marginal, because of a (welcome) Nationwide branch and an overstretched Post Office business service. South Molton may have one of the best rural markets in the country, but relies on the mobile bank to service it.
With other rural post offices closing down, accessing banking services and cash is hard, particularly for businesses. In an area that spans nearly 850 square miles, eight of our nine branches (including building societies) are less than 500 yards from one another. Overall, there has been a 61 per cent reduction of branches over the last decade
Through provisions contained within the Financial Services and Markets Act, the Government has taken the first, positive steps to maintaining free access to cash for those that need it most. However, the job is far from complete.
Despite significant efforts by those across Parliament and industry to raise awareness of the funding issues facing the free cash network, neither officials nor the Financial Conduct Authority (FCA) have shown any indication of looking to address this as they look to implement the Government’s plan.
As the FCA picks up the mantle of protecting cash, it is critical that they address the funding of the ATM network to ensure independent operators can continue to fill the geographic gaps in provision that are being created as banks pull out. This way, SMEs can continue to access the cash they need, rural communities will continue to be well-served, and money will be saved on costly cash access assessments.
And while it’s encouraging to see bank hubs begin to be introduced as a long-term alternative, greater collaboration between central government, industry, and local authorities is desperately needed to increase the pace at which these innovative solutions are rolled out across the country.
If we continue down the same path, we will face two catastrophes: a cliff-edge in free cash access, undermining payment choice for businesses and severing a lifeline for vulnerable consumers, and the hollowing-out of face-to-face banking services, with banking hubs not matching the pace at which proper branches are closing.
To avoid this, the Government and the FCA should listen to parliamentarians and industry leaders (who have long been raising the issue of ATM funding), and strive for a sustainable long-term future for the UK’s cash and banking infrastructure.
This is not about slowing the progress of enabling new payment methods. It is about ensuring the right steps are taken to guarantee choice for our constituents, maintaining cash as part of the payment mix of the future for the individuals and businesses that need it most.
The free cash network and local banking services are a critical part of our national infrastructure which has been neglected over time as habits have changed: it is well overdue a thorough shake-up to improve and protect access.
Selaine Saxby is MP for North Devon.
Close to 6,000 bank branches have disappeared from our high streets in the last few years, and it is estimated that nearly three million people will live in a constituency without a bank branch by the end of 2024. At the same time, data suggests that the UK’s highstreets will lose 24,500 free-to-use ATMs in less than ten years, as the network contracts and banks remove duplicate machines.
The communities we represent – particularly those without large urban centres – are running out of places to access both their cash and vital, face-to-face financial services.
This reduction of access profoundly affects both consumers and businesses. We know that around three million people in Britain still use cash for every transaction they make; in 2022, usage of cash increased for the first time in 13 years, as people used it as a budgeting tool to deal with the cost-of-living crisis.
Furthermore many businesses, particularly SMEs, continue to rely on cash transactions. Driving miles to deposit cash earnings is not only bad for these businesses, but also for the communities they serve.
In my own constituency of North Devon, I have seen the closure of every traditional bank north of Barnstaple. Ilfracombe, the second largest town, should qualify for a Banking Hub – but is marginal, because of a (welcome) Nationwide branch and an overstretched Post Office business service. South Molton may have one of the best rural markets in the country, but relies on the mobile bank to service it.
With other rural post offices closing down, accessing banking services and cash is hard, particularly for businesses. In an area that spans nearly 850 square miles, eight of our nine branches (including building societies) are less than 500 yards from one another. Overall, there has been a 61 per cent reduction of branches over the last decade
Through provisions contained within the Financial Services and Markets Act, the Government has taken the first, positive steps to maintaining free access to cash for those that need it most. However, the job is far from complete.
Despite significant efforts by those across Parliament and industry to raise awareness of the funding issues facing the free cash network, neither officials nor the Financial Conduct Authority (FCA) have shown any indication of looking to address this as they look to implement the Government’s plan.
As the FCA picks up the mantle of protecting cash, it is critical that they address the funding of the ATM network to ensure independent operators can continue to fill the geographic gaps in provision that are being created as banks pull out. This way, SMEs can continue to access the cash they need, rural communities will continue to be well-served, and money will be saved on costly cash access assessments.
And while it’s encouraging to see bank hubs begin to be introduced as a long-term alternative, greater collaboration between central government, industry, and local authorities is desperately needed to increase the pace at which these innovative solutions are rolled out across the country.
If we continue down the same path, we will face two catastrophes: a cliff-edge in free cash access, undermining payment choice for businesses and severing a lifeline for vulnerable consumers, and the hollowing-out of face-to-face banking services, with banking hubs not matching the pace at which proper branches are closing.
To avoid this, the Government and the FCA should listen to parliamentarians and industry leaders (who have long been raising the issue of ATM funding), and strive for a sustainable long-term future for the UK’s cash and banking infrastructure.
This is not about slowing the progress of enabling new payment methods. It is about ensuring the right steps are taken to guarantee choice for our constituents, maintaining cash as part of the payment mix of the future for the individuals and businesses that need it most.
The free cash network and local banking services are a critical part of our national infrastructure which has been neglected over time as habits have changed: it is well overdue a thorough shake-up to improve and protect access.