The UK Government is introducing rules which grant the Financial Conduct Authority (FCA) new powers over the UK’s largest banks and building societies to ensure that cash withdrawal and deposit facilities are available in communities across the country.
This should allow the financial regulator to address cash access issues at both a national and local level.
The Treasury will in due course set out its expectations for a reasonable distance for people to travel when depositing and withdrawing cash, reflecting the existing spread of cash withdrawal and deposit facilities in the UK.
Cash is the second most frequently used method of payment in the UK, and around 5.4 million adults rely on cash to a very great or great extent in their daily lives.
Economic Secretary John Glen, who will be visiting Scotland on Thursday, said: “Millions of people across the UK still rely on cash, particularly those in vulnerable groups, and today we are delivering on our promise to ensure that access to cash is protected in communities across the country.
“I want to make sure that people are still able to use cash as part of their daily lives, and it’s crucial to ensure that no person nor community across the UK is left behind as we embrace a more digital world.”
The government passed legislation to enable the widespread adoption of cashback without a purchase as part of the Financial Services Act 2021.
Last month, Westminster also announced its intention to legislate to provide the Bank of England with the powers necessary to ensure the UK’s wholesale cash infrastructure - which includes the network of cash centres integral to the sorting, storing and distribution of notes and coin - remains resilient and sustainable, and continues to support access to cash across the UK.
These powers will be legislated for in the upcoming Financial Services and Markets Bill.
In December, the sector announced that it had developed a voluntary industry model that accounts for the different types of facility that provide cash access, including initiatives to provide shared services, to protect access to cash.
Under the model, a coordination body assesses the cash needs of local communities and makes recommendations for alternative services to be put in place as appropriate. The government intends to enable the Treasury to designate cash coordination bodies for FCA oversight.
This has been facilitated through the Cash Action Group, which was convened by UK Finance and consists of major retail banks and building societies, consumer groups, Post Office and LINK.
On Monday, the Scottish Affairs Committee will be hearing from Glen in a final evidence session of its Access to Cash inquiry.
The 2019 Access to Cash Review concluded that government bodies and regulatory authorities needed to work together to ensure people could continue accessing cash.
Despite recent government interventions, since 2015, 52% of bank branches on Scottish high streets have closed, and a further 30 are due to close this year. Which? figures indicate that Scotland is the region of the UK that will have experienced the highest proportion of closures.
Scottish Affairs Committee chair Pete Wishart said: “This evidence session with the minister comes at a pivotal time for the future of access to cash in Scotland.
“In our own survey, we found overwhelming support for people to continue being able to access their money, and our evidence sessions have heard a range of industry initiatives to continue supporting people - despite this, we are losing our high street bank branches at an alarming rate.
“Hearing from the Treasury Minister will give our Committee the opportunity to discuss just how the access to cash policy is impacting the people of Scotland.
“We know Scotland is suffering a disproportionate amount of bank closures, and we are keen to see what more support can be offered.”
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free.
