Most people have ‘reasonable access to cash,’ finds FCA

Most people have reasonable access to cash through a combination of bank, building society, or post office branches and ATMs, according to new research from the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR.)

The authorities estimate that 95.4 per cent of the UK population are within 2km of a free cash access point and 99.7 per cent are within 5 km. Although the FCA admits there are still some pockets of society that do not have sufficient access.

Consumers’ ability to access banking services and cash can be affected when banks and ATM providers make decisions to close branches and cash machines.

In September 2020 the FCA published guidance on how it expects firms to approach branch and ATMs closures or conversions to make sure their customers are treated fairly. In May 2021 the FCA and PSR published a joint statement on their work to date and the FCA also reaffirmed its expectations for industry at the Which? Cash Summit.

The PSR recently published its second annual review of Specific Direction 8 (SD8) which ensures LINK does all it can to make free-to-use ATMs available for UK consumers.

It has decided SD8 should remain in place until it expires in January 2022. The PSR will continue to monitor LINK’s commitment and how it is being met.

The PSR is currently considering whether to issue a new direction to replace SD8 when it expires.  

Since then, the Treasury has launched a consultation on establishing geographic requirements for the provision of cash withdrawal and deposit facilities, the designation of firms for meeting these requirements, and establishing further regulatory oversight of cash service provision.

“Around 5 million adults say they still rely on cash, and we know that where access is removed, it can affect the most vulnerable in society,” said Sheldon Mills, executive director, consumers and competition at the FCA. “This is why we have intervened in the past to provide banks with guidance on what to consider when closing branches.”

Mills said that while most of the UK population have reasonable access to cash, there are still pockets of consumers, some displaying characteristics of vulnerability, who do not have sufficient access to cash.

“We expect firms to help protect access to cash and wider banking services in ways that meet consumers’ needs, and we continue to engage with firms closing their branches, to ensure that they treat their customers fairly,” he added. “We will also review over the coming months how we can strengthen our guidance to help protect reasonable access to cash and banking services.”

The FCA and the PSR said they will continue to work with Government to prepare for legislation, and with industry and other stakeholders on cash access issues. The FCA intends to update on the next steps on its work in Q4 this year.

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