Context
The FCA and the PSR have issued a joint statement in relation to access to cash, and the FCA has also published a speech given on the same topic by Sheldon Mills, Executive Director, Consumers and Competition, delivered at Which? Cash Summit 2.0 – Cash access and acceptance.
The joint statement points out that access to cash and banking services remains vital for many consumers and businesses. For example, the FCA’s Financial Lives Survey in 2020 found that 5 million adults use cash for most of their purchases. The coronavirus pandemic has led, though, to more people becoming familiar with contactless card payments and internet shopping.
The overall decline in the use of cash makes it more expensive to maintain the existing infrastructure that supports it. However, as we move out of the pandemic, the joint statement points out that cash continues to serve a socially useful purpose for many communities. Following a fall in ATM withdrawals of 40% year-on-year across 2020, withdrawals have started to increase again since restrictions have begun to ease.
Although the FCA’s data shows that most people can access cash easily and that access to cash is generally good, the FCA believes that there is a need to maintain access to cash and banking services for those that still need it, particularly vulnerable consumers.
Key points to note
The Joint Statement
- The FCA and the PSR both believe that cash must remain available
- During the pandemic, the FCA and PSR worked with industry to address the challenges of ensuring cash access for the people who want to use it.
- In September 2020, the FCA published guidance setting out its expectation that firms should consider the impact of branch and ATM closures on their customers’ everyday banking needs and consider the availability and provision of alternatives.
- The government announced last year its intention to legislate to maintain access to cash in the long-term.
- The FCA expects individual firms to play their part in protecting the ability of customers to access cash and wider banking services in ways that meet their needs, particularly vulnerable customers and SMEs. This will be of interest to many other authorised firms who rely on the local availability of banking services.
FCA speech – Sheldon Mills
- Based on the FCA’s evidence, the Regulator believes that access to cash across the UK is generally good for most people. However, as the future of cash and branch banking evolves, government, regulators and industry need to play their part in maintaining good access.
- The FCA and the PSR are committed to protecting access to cash, particularly for cash reliant vulnerable consumers.
- Legislation is essential to protect access to cash, but the FCA wants individual firms and the wider industry to play a role; it expects individual firms to protect the ability of their customers to access cash and other services that meet their needs when they close branches.
- The Regulator and firms must work together to protect the ability of consumers and businesses to access cash and banking services. The FCA and the PSR will continue to work in an open and transparent way with consumer bodies and the firms they regulate to achieve their desired outcome, including using the full range of regulatory tools available to them where they need to.
Next actions
None – for information and awareness. For smaller insurance brokers facing difficulties with local banking services availability, this may be of interest.