The proportion of people living near major banks and building societies shrank in the third quarter of 2021 as branches were closed, according to figures from the City regulator.
However, Post Office branches helped to maintain overall cash access levels.
An estimated 95.5% of the UK population were within 2km of a free-to-use cash access point and 99.7% were within 5km in the third quarter of 2021, the FCA said.
These overall figures includes access to banks, building societies, Post Office branches and ATMs.
Coverage estimates are unchanged from the second quarter of 2021, the FCA said.
However, it said the types of available access points did change compared with the previous quarter.
The number of bricks-and-mortar branches of the larger banks and building societies providing personal current accounts continued to fall, as 224 (4%) ceased to do this.
Coverage by these branches decreased from 60.1% to 59.6% of the UK population at 2km and from 87.5% to 87.4% at 5km.
An increase in the availability of Post Office branches offset the reduction.
The number of free-to-use ATMs declined, but the impact on coverage appears negligible, the FCA said.
There was a small increase in bank and building society branches’ opening hours in the third quarter of 2021, from 34 hours per week on average in the previous quarter to 35 hours.
However, around 81% of these branches were still operating on reduced opening hours compared with February 2020, the FCA said.
Among branches, 62% of larger personal current account providers and 54% of other branches reported that they are wheelchair accessible, have step-free access and have a hearing/induction loop – a similar number to the previous quarter.
Some 78% of Post Office branches (excluding mobile and outreach branches) have both wheelchair access and a hearing/induction loop, an increase of three percentage points from the previous quarter, the FCA said.
About 14% of larger personal current account providers and 9% of other bank and building society branches were temporarily closed for at least one day during the third quarter of 2021 due to coronavirus and other reasons.
The FCA gathers data on access to cash on a quarterly basis alongside the Payment Systems Regulator (PSR). It measures distances “as the crow flies”.
People in rural areas travel further to access services compared with the urban population.
Around 99.7% of people living in urban areas in the UK had access to a free source of cash within 2km, falling to 77.4% in the rural population.
Overall, the FCA estimates that 99% of the UK rural population have access to a free source of cash within 5.7km.
Including cashback as a source of cash alongside all other access points, the FCA estimated that, overall, 99% of the UK population were within 2km of a source of cash and 99.9% were within 5km of a cash source.
The regulator has said it wants to ensure that bank branch and ATM closures or conversions are made in a way that takes proper account of customers’ needs. It previously issued guidance outlining expectations of how firms should conduct their closure processes.
It expects firms to assess how plans will affect customers, particularly those in vulnerable circumstances, and to make appropriate arrangements to ensure their needs are still met. This includes assessing what alternatives could be put in place.
The FCA said it has seen examples of good practice by firms.
But it has also seen areas that need improvement – for example firms relying on remote research when looking at alternative services rather than an on-site assessment of the options. This could mean they missed factors which could have been picked up by visiting, such as footpaths and stepped access.
Areas for improvement also included firms’ plans not being sufficiently altered to take into account consumer feedback on the impact of a closure.
Some firms did not take into account the unique aspects of the customer profile at the closing branch or did not have enough data to identify which customers may need additional support due to vulnerable circumstances.
This meant they they could not work out how the proposed closure may affect them and identify any suitable alternatives, the FCA said.
