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The future is undoubtedly digital – but bank closures are leaving people without access to cash


3 min read

First, they closed the bank branches, then they closed the cash machines, then they questioned the point of cash itself, then they didn’t financially serve us. Our high streets, our communities, the financially vulnerable, all of us, left high and financially dry.

I have campaigned for greater access to cash and financial inclusion for years calling for the cash network to be designated as critical national infrastructure and legislating for a universal service obligation for cash provision and introducing an amendment to the Financial Services Act 2021 to permit cashback without purchase.

Last week I asked the government how many bank branches have closed, and how many shared banking hubs have opened, in the last 12 months and what steps they are taking to minimize the former and speed up the latter.

There should be no gap in provision between branch closures and, if they are the solution, banking hubs opening

Answering my own question, the figures are stark, in the last 12 months 847 bank branches have closed or are set to close, thousands since 2015, and the rate of closure seems to be accelerating.

Banking hubs – community banks, funded by the major high street banks and which customers of all banks can use – have been proposed as a solution to branch closures. How many banking hubs have opened so far?  Just four.  

Cash still matters, and it matters materially to millions. Banking hubs are an interesting proposal, but it can’t be that communities are left without any banking provision whatsoever while they wait for their arrival.

I asked the government to explain what local residents and businesses should do when they need access to withdraw or crucially, deposit cash or to speak to a bank representative and they find themselves with neither a bank branch nor shared banking hub.

The minister responded that they do not intervene in commercial decisions, that the pace of delivery for banking hubs is expected to accelerate over the coming months (despite only four being opened over 50 have been announced) and that people can also access everyday banking via their local Post Office. 

The government must do more. They need to act to ensure local banking provision, including deposit taking as well as withdrawals and advice. They must also act on acceptance of as well as access to cash. What currency cash if no place to spend it?

The United Kingdom is at the forefront of the global finance industry and a leader in the fields of financial services, technology, and innovation, it is unacceptable that a significant number of UK citizens lack access to even the basics.

The pandemic has accelerated bank branch closures and a growing emphasis on digital services,  not enough has been done to address the crisis facing individuals who can no longer rely on face-to-face banking. Banks must not be let off the hook, there should be no gap in provision between branch closures and, if they are the solution, banking hubs opening.

Think of anyone without the necessary digital skills who cannot now speak to someone about their banking needs. Think of the person, using cash to budget but unable to pay for a cup of tea with it. Think of the small business who does still take cash – perhaps so that elderly person in need of a cuppa – having to close up shop early to drive to the next village to deposit their takings?

The future is undoubtably digital, but we must not move forward into that future without including everyone. Hence, my message to the government is to urge them to consider commissioning a review into access to digital financial services for all our benefit.


Lord Holmes, Conservative peer

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