Major UK banks have agreed to create a network of shared banking hubs to ensure communities have fair access to cash.
The agreement comes amid mounting pressure over UK bank branch closures as more people switch to mobile and online banking.
According to consumer campaigning group Which?, the rate of bank branch closures has increased significantly in 2021, peaking between June and August when 298 branches closed their doors - an average of 99 per month.
In total, Which? revealed there have been 736 bank branch closures this year, with another 220 already set to close in 2022. Since January 2015, banks and building societies have closed or scheduled the closure of 4,734 branches.
The retreat from the high street has led to significant concerns over access to cash for vulnerable and older people who still rely on notes and coins in their daily lives.
The collaboration, achieved through the Access to Cash Action Group (CAG) (all major retail banks, Age UK, Toynbee Hall and the Federation of Small Businesses (FSB)), marks the beginning of a long-term commitment to ensuring widespread cash and banking access for communities where services are limited.
Under the new model, any community that faces the closure of a core cash service, such as a bank branch or ATM, will have its needs independently assessed by the UK's major ATM network Link. Communities will also be able to request a review of their needs from the summer of 2022.
Link has already assessed most communities where closures have taken place over the past year. As a result, up to eleven communities will be provided with free-to-use ATMs, and up to five locations will have access to a shared banking hub. The Post Office has also pledged to deliver new and improved, dedicated cash services in up to 30 branches.
John Howells, chief executive, Link, comments: "Our relationship with cash is changing but the UK is not ready to be a cashless society and free access to cash remains vital for many consumers and communities. Link is therefore delighted to take on such a key role working with the banks to ensure that the cash needs of communities continue to be met."
The initiative has achieved a cautious welcome from Which?. Anabel Hoult, Which? CEO, says: “The banks will now need to demonstrate that these measures deliver what is needed, and we will be watching closely to see the extent to which they prevent communities from losing access to cash.
“The government still needs to swiftly introduce its long-promised legislation to underpin these measures and ensure that consumers will continue to be able to access cash for as long as it is needed.”
In a related development, the Bank of England has moved to shore up the UK's wholesale cash network, which sits between the issuers of new notes and coins, and those notes and coins being sent to individual bank branches, Post Offices, ATMs and retailers. The central bank is demanding commitments from UK banks that fund or participate in the wholesale cash infrastructure and the UK wholesale cash operators to ensure an "effective, resilient and sustainable" market to support continued retail access to cash.
To reinforce the approach, the Bank of England has asked industry participants to bring forward by the end of Q1 2022, individual, measureable commitments with a set of key indicators and criteria that they are willing to be held accountable for.
The Bank of England’s chief cashier Sarah John says: “Cash remains an important way of making payments, and the ability to use cash is critical for many people in the UK. That is why we have to make sure the infrastructure for distributing cash around the country remains viable in the years to come. The commitments made today will ensure that the provision of cash services to households and firms is underpinned by an effective, sustainable and resilient cash distribution network."