The UK regulatory body, the Financial Conduct Authority (FCA), has confirmed a plan to further protect the right to access cash for consumers and small businesses.
Under the new regulation, starting of 18 September 2024, banks and building societies must assess cash access and understand if additional services are required, respond to local residents, community organisations, and representative groups, identify significant gaps and deliver reasonable additional cash services, and keep facilities (i.e., bank branches and ATMs) open until additional cash services identified are available.
Despite the rise in digital payments adoption, more than three million people in the UK continue to strongly rely on cash. At the same time, many small businesses require a safe haven for their cash deposits each day, which prompted FCA to act quickly in response.
Even though FCA’s powers cannot stop bank branches from closing across the country, their impact will be reduced by implementing additional measures to ensure cash access. According to an article from The Guardian, more than 6,000 UK branches have closed since 2015, with a peak in 2017. Banks justify the action on the grounds that customers favour online banking and mobile banking instead of traditional counter services, but this has also led to a significant gap in cash availability for the large population.
To bridge the gap and deliver a new cash access system, the government designated 14 banks and building societies. At the same time, the FCA extended the period for banks and building societies to carry out cash access assessments.
Finally, according to the regulatory body, those who rely heavily on cash are low-income households (with less than GBP 15,000 a year) and those who have low digital capability or access to alternative digital payment methods.
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