The Financial Conduct Authority (FCA) has set out its expectations for the steps firms should take when considering closing branches or ATMs, or converting a free-to-use ATM to pay-to-use.

In its finalised guidance, the regulator made clear that banks, building societies and credit unions are now expected to keep it informed of any plans for closures or conversions in good time before any final decision is made.

Before making a final decision, the FCA expects firms to provide a clear summary of their analysis of the needs of customers currently using the sites, the impact of the proposals on those customers, and alternatives that are - or could reasonably be - put in place if they implement the proposals.

If a firm decides to implement its closure or conversion proposals, it will be expected to clearly communicate information about this to its customers no less than 12 weeks before the proposals are implemented. This should include making customers aware of alternatives they can use, giving customers time to take action, such as changing banking provider.

Sheldon Mills, interim executive director of strategy and competition at the FCA, said: "Although closures or conversions are decisions for firms to take, it is important they implement these decisions in ways that are fair to their customers.

"Even during the pandemic, cash remains essential to many consumers - the publication of this guidance sets out clearly our expectations on firms and will ensure that firms make it a priority that customers are treated fairly, especially those who are most vulnerable."

This guidance applies to FCA-regulated firms that operate physical sites such as bank branches, building society branches, credit union offices or cashpoints. It applies from 21 September.

The FCA added that it continues to work closely with the Payment Systems Regulator as part of its wider efforts to ensure an appropriate and sustainable model of maintaining access to cash.

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