UK’s Financial Conduct Authority to step up protections for cash access
The UK’s Financial Conduct Authority has announced new protections on the horizon for cash deposit and withdrawal services.
The FCA to exercise new powers to save cash access
The financial watchdog has responded to a request made in the UK parliament’s Cash Access Policy Statement in its Finance Services and Markets Act 2023 to “ensure reasonable provision” of these services.
The FCA has confirmed that it will “seek to maintain a network of cash access facilities that is in keeping with the current distribution of services” and that “our approach will be balanced”.
Despite great advancements in digital banking, cash retains a stronghold in UK spending habits, with 3.1 million adults using cash to pay “for everything or most things” throughout the year preceding May 2022, the FCA states.
And despite ongoing branch closures, access to cash remains “generally good”, with 95.1% of the population living within one mile of a free-to-use cash withdrawal point as of Q2 2022.
The FCA is seeking to maintain and improve this access, and will propose rules that will require banks and building societies to conduct assessments of “the reasonableness of cash provision when certain significant changes in local access occur or are proposed”.
These assessments will extend to decisions on brank closures, post office closures or the removal of an independently operated ATM.
The regulator confirmed that its rules to protect cash would be enacted on a region-by-region basis, and that “needs will vary according to the demographics of the local population, and characteristics of the area”.
“We therefore expect to propose rules that focus designated firms’ efforts in local areas where deficiencies in cash access would be likely to have a significant impact.”
A full consultation on its approach is expected to commence shortly, with the FCA indicating that depending on the outcome, the new rules will take effect by “summer 2024”.
