Access to cash sparks broad association in UK

What can bring the UK's major legacy banks, consumer groups and the local Post Office together? The issue of access to cash for part of the population. With the digitisation of services and the closure of branches, access to this essential service is now uneven across the country and a combination of forces is needed to restore equity.

FACTS

• In the UK, cash is still used to pay by millions of people every day. But at the same time, the number of branch networks is shrinking and the closure of ATMs is continuing.

• To maintain equity in access to cash, a new collaboration involves a majority of the major retail banks (Barclays, HSBC UK, Lloyds Banking Group, Nationwide building society, NatWest, Santander UK, TSB and Danske Bank), the older people's charity Age UK, Toynbee Hall social centre and the Federation of Small Businesses (FSB). It is organised by the Access to Cash Action Group (CAG).

• CAG aims to create shared banking hubs deployed through the installation of free ATMs within the UK Post Office network.

• The UK ATM network Link is also involved. It is responsible for assessing the local impact of a branch closure on the cash supply to the population and approaching the local Post Office if necessary, to create a new banking hub.

• 11 such branches have already been deployed in Betchworth (Surrey), Bo'ness (West Lothian), Brentwood (Essex), Hugh Town (Isles of Scilly), Low Fell (Tyne and Wear), Merthyr Vale (Mid Glamorgan), Mosborough (South Yorkshire), Norwich (Norfolk), Putney (London), Woolhampton (Berkshire) and Woodbury (Devon).

ISSUES

• A working pilot: The decision to create shared banking services follows successful regional pilots in eight UK communities.

• A cyclical issue: 736 branches have been closed in the UK in 2021 and 221 are expected to close in 2022. Cash use has declined in recent years and the trend has accelerated with the health crisis; cash is used 35% less in the UK than before the pandemic.

• Need to adapt to regulations: The Bank of England has set a deadline by the end of the first quarter of 2022 for banks to submit plans to stabilise cash flows.

MARKET PERSPECTIVE

• The UK has long been working to address the problem of access to banking and cash in rural areas where people are underserved.

• Start-up OneBanks and the UK retail cooperative Co-op introduced a multi-banking service kiosk last December.

• The problem of making networks profitable and preserving access to banking services is not only British. In France, the issue has led to a project to pool the ATM networks of BNP Paribas, Société Générale and Crédit Mutuel.