Cash safety guidelines come into pressure this week – what’s altering?

New rules to protect access to cash for consumers and small businesses will come into force on Wednesday.

The Financial Conduct Authority authority announced in June it had been handed fresh powers by the Government to ensure reasonable access to cash withdrawal and deposits.

Under the new rules, banks and building societies will have to weigh up whether local communities lack access to cash services, like branches and ATMs, and provide additional services where they find ‘significant gaps’.

A significant gap includes small towns in a remote areas where the last bank branch shut and there is a long distance to travel to the next town to visit a branch.

Banks and building societies will have to assess local gaps in access to cash 

From Wednesday, banks and building societies will have to assess cash access and understand if additional services to provide access to cash are needed when changes are being made to local services such as a bank branch closing.

Banks and building societies will be required to respond to local residents, community organisations and representative groups, who will be able to request an assessment of whether there are gaps in local cash access.

Where significant gaps are found, the banks and building societies will have to deliver reasonable additional cash services.

The FCA said gaps in cash access could be filled with a range of measures, including banking hubs, ATMs (including deposit ATMs) and Post Office facilities.

The progress and compliance with the rules will be overseen by the FCA. 

Banks and building societies will be responsible for delivering additional services required by their assessments in access to cash gaps. 

If a bank closes a branch before alternative provision is in place, or there are unreasonable delays to providing the required cash access services, they will be in breach of FCA rules.

Where the FCA identifies serious or persistent breaches of the rules, it will use its full range of powers to tackle them.

There will also be a requirement put on a bank which announces the closure of the last bank in a town where cash machine network Link recommends a hub. 

Where a bank branch is due to shut but is the last bank branch in town, it won’t be able to close its doors until a banking hub is open and up and running. 

This way no town should be left without access to cash services whether it is through a bank or building society or a banking hub.

A banking hub is a shared centre where customers of most major banks can go to withdraw and deposit cash and get banking support and advice.

They were created in response to widespread branch closures, with 6,000 bank branches having shut their doors since 2015.

Labour has pledged to roll out 350 banking hubs in towns and villages across Britain over the next five years.

15 locations to receive banking hubs

Link, will also announce on Wednesday 15 locations where new banking hubs will be launched. 

Harpenden in Hertfordshire and Whitley Bay in Tyne and Wear are among the towns set to receive a banking hub. 

The banks which fund the hubs – set up through the non-profit company called Cash Access UK – will change the rules on where a banking hub can be located.

Currently, a banking hub can only be set up in a town that has lost its last bank. They were also ruled out in towns where Nationwide still had a branch. 

Nationwide has its own branch promise in place, meaning that everywhere there is a Nationwide branch that branch will remain in place until at least the start of 2028. 

Most of the 15 banking hubs to be announced on Wednesday will now be in areas where Nationwide has a branch.