UK banking and finance industry commits to support local communities' free access to cash

  • UK banking and finance industry commits to helping local communities to identify and secure appropriate free access to cash for customers.
  • The work builds on the Access to Cash Review, chaired by Natalie Ceeney CBE (the Ceeney Review), and will look at how the banking and finance industry can improve customer outcomes by building an overview of the range of channels currently available on a community by community basis and developing an approach for how industry could work with local authorities to identify and report gaps in cash provision.
  • UK Finance will publish an update and progress report by 30 September 2019.

Building on the work and findings of the Ceeney Review, UK Finance is today announcing the banking and finance industry's commitment to helping local communities to identify and secure appropriate free access to cash for customers.

Despite consumers and small businesses increasingly choosing to make and accept payments via card or with their mobile phone, cash remains the second most frequently used payment method in the UK. According to UK Finance's latest Payment Markets report2, cash was used for 28 per cent of payments in 2018 and is forecast to be used for one in ten payments in a decade's time driven by the growth in contactless and mobile payments.

UK Finance is currently working with the recently established Joint Authorities Cash Strategy Group (JACS) 3 to help ensure cash continues to be available to those who need it. More detailed work is required to understand the future cash needs of local communities, in particular, remote rural and urban deprived communities, and to design a system which addresses how those community needs can best be served quickly and efficiently, should a problem emerge.

Over the summer UK Finance will engage with consumer representatives, local authority representatives and market participants, including LINK and its members, to:

  • map the range of channels through which consumers can access cash (e.g. bank and building society networks; post office, ATMs, merchant cashback, etc); 
  • consider the potential of a number of industry pilots already underway to deliver new options for cash provision;
  • develop an approach for how industry could work with local authorities to help communities to identify and report gaps in cash provision;
  • develop a definition of industry's commitment to customers and communities in terms of the ?appropriate provision for free access to cash?;
  • consider how this new approach could involve the creation of an independent body with responsibility for responding to access to cash representations and coordinating and facilitating appropriate industry action; and
  • work with LINK, the Post Office and the Payment Systems Regulator (PSR) to identify ways in which the existing commitments4 and delivery against them, can be developed and improved.

UK Finance will continue to work closely with the PSR, Financial Conduct Authority (FCA), Bank of England and government as they take forward their work in this area.

Stephen Jones, Chief Executive of UK Finance, said:

Securing free access to cash for those who continue to need to use it is a clear shared objective - and one that government, regulators, industry, customer groups and communities need to come together to solve. We need to take a collaborative approach to the problem and work out a shared solution. Today the banking and finance industry is setting out a clear statement of intent and a series of practical next steps to ensure that cash will remain widely accessible and free for those that need it to help manage their finances and pay for goods and services.

Natalie Ceeney CBE, Chair, Access to Cash Review said:

UK Finance's announcement today, to explore how industry could secure the right level of free access to cash, should be applauded. The acknowledgment from the UK's major banks that the UK public will continue to need free access to cash is, in itself, hugely welcome. We need to take action urgently, and the commitment to reaching conclusions quickly is welcome. Digital payments don't yet work for everyone, and millions will be left behind if we don't preserve free access to cash, and support businesses to keep accepting cash.  I look forward to seeing action taken, and to the banking and finance industry, working with government, regulators and other sectors, doing the right thing for consumers and communities.

City Minister, John Glen, said:

While technology is transforming how we manage our finances, for many cash remains a vital part of their day-to-day spending. This is why I recently announced that we?ll be protecting the future of cash, co-ordinating work across government and industry, and pushing for further action to ensure continued access. UK Finance's upcoming work in this area is therefore extremely welcome. It will help us to build on these efforts, support communities up and down the country and provide choice over how they spend their money.

UK Finance will publish an update and progress report on the above by 30 September 2019.

Area of expertise:

Notes to editor

<ol><li>UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms across the industry, we act to enhance competitiveness, support customers and facilitate innovation.</li>
</ol><p><img alt="" src="…; style="width: 582px; height: 280px;" /></p>
<p><sup><em>Source: UK Finance Payment Markets Report 2019</em></sup></p>
<p>A summary of the UK Finance Payment Markets Report 2019 can be found <a href="…;.  A full version is available for purchase on request. The average number of payments made each month by the average adult was:</p>
<ul><li>28 card payments, of which 11 were contactless</li>
<li>17 cash payments</li>
<li>6 Direct Debits</li>
<li>1.3 payments via online banking or mobile banking</li>
<li>0.8 standing orders</li>
<li>0.3 cheques</li>
</ul><ol start="3"><li><strong>Access to cash: </strong>UK Finance and its members are working with the recently established <a href="… Authorities Cash Strategy Group</a> (JACS) and wider stakeholders, to ensure customers have a choice in how they pay for goods and services. To support the use of cash, all the high-street banks have arranged for everyday banking services to be available through 11,500 Post Offices across the country. Banks are also investing in ATMs and mobile bank branches to reach more rural communities.
<p> UK Finance?s Access to Cash Working Group, comprising representatives of the largest retail banking institutions, has led UK Finance?s initial work in response in response to the Access to Cash Review recommendations and has agreed the work outline above. UK Finance will now engage its wider membership as work is progressed over the summer.<br />
<li>At the Post Office, personal banking customers can now: withdraw cash, deposit cash or check their bank balance. Business customers can: deposit cash or cheques into their business bank account, withdraw money from their business bank account. check their current balance or get change when they need it. A <a href="… action plan</a> to raise awareness of the service was launched in 2018.
<p> In October 2018, the <a href="">PSR directed</a> the operator of LINK to maintain the broad geographic coverage of the free-to-use ATM network in the UK, to meet service-user needs and to ensure that it has the resources to do so. The PSR considers it is necessary for it to have clarity:</p></li>
</ol><ul class="rteindent1"><li>on the scope of LINK?s commitment;</li>
<li>on the terms of the operator of LINK?s procedures, processes, policies and measures;</li>
<li>that certain minimum requirements will be complied with by the operator of LINK; and</li>
<li>that LINK will secure such expertise, resources, equipment and/or software that may be required from time to time to enable it to fulfil its commitment.</li>
</ul><p class="rteindent1">The PSR requires regular detailed updates from the operator of LINK to enable it to assess whether LINK?s strategies are meeting?and continue to meet?consumer needs.</p>
<p class="rteindent1">LINK?s commitment is to maintain a free-to-use ATM within 1 kilometre of the next-nearest ATM (i.e. to protect the existing footprint) unless there is a post office within 1 kilometre.</p>
<p class="rteindent1">LINK has run a <a href="">Financial Inclusion Programme</a> since 2006 with the aim of improving free access to cash in the most deprived areas of the UK. </p>
<p class="rteindent1">To ensure communities can still access the services they need when branches are closed banks conduct impact assessments of the branch closure covering the alternatives available to the community for access to cash, not just access to ATMs, but also mobile branches and the Post Office. This analysis works on the existing alternative provision rather than the assumption of a third party stepping in to provide an alternative access.</p>
<p class="rteindent1">The revised Access to Banking Standard launched by the industry (following an independent review) in May 2017 provides a channel and process for LINK (and their members) to monitor and action publicly available information (on each bank?s website) on bank branch closures. The Standard provides for a 3-month notification of a bank branch closure and an indication if an ATM will be affected. The revised Standard applies to all bank branch closures announced after 1 May 2017.</p>