With access to free cash disappearing from some highstreets, the UK regulator the Financial Conduct Authority (FCA) has issued fresh guidance to banks and financial institutions on the provision of ready money.
The regulator has told banks and building societies that they now need to inform the authority if they plan to remove free-to-use cash points, or swap them for pay-to-us machines.
“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,” the FCA said. “This should include making customers aware of alternatives they can use. This will give customers time to take action, such as changing banking provider.”
“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.” Sheldon Mills, Interim Executive Director of Strategy and Competition, said. “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.”
The 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 2020.
Consumer groups such as Which? have long complained that the disappearance of free facilities to withdraw cash disproportionately disadvantages the poor. In 2019, the government set up a new Joint Authorities Cash Strategy Group (JACS) chaired by the Treasury. It includes the Payment Systems Regulator, the Financial Conduct Authority and the Bank of England. Its remit is to provide an oversight of the entire cash system in the UK.
The government estimates that about two million people depend on cash, including the elderly, those in rural communities and some disadvantaged people.
The independent pressure group, Access to Cash Review (ATCR), warned last year that the UK was at a tipping point towards going cashless – without fully understanding the implications for everybody.
The march of the digital society has enabled businesses to cut costs, but at the risk of alienating or excluding those who are unable to access such networks. Statistics from ATCR reveal: